India’s Central Bank, also known as The Reserve Bank of India (RBI), had made headlines in the cryptocurrency community not too long ago when it announced that the nationwide ban on cryptocurrency usage should be removed. Indian investors were understandably overjoyed at this development. However, the bank itself may not be supportive of cryptocurrency despite the elimination of the ban.
Although the bank’s directive to force the nation’s financial institutions to stop dealing with cryptocurrency may no longer be applicable, investors should nevertheless exercise caution as the RBI is displaying little to no signs of changing its own stance on the new digital asset class.
RBI still has ‘major concerns’ with crypto
Shaktikanta Das, the RBI’s governor, has stated the bank’s stance on cryptocurrency is one of hesitation and concern, and it has thus been thoroughly conveyed towards the nation’s government.
These comments by the governor had been made following the reversal of the RBI’s now-defunct circular, which had stated that the usage of cryptocurrency had been effectively banned. Regardless of the fact that the country’s Supreme Court had considered the ban to be disproportionate and had it dismissed all the way back in March of last year, this did little to deter other banks’ fear of the RBI and what it might do were cryptocurrency-related products and services initiated on a large scale.
Cryptocurrency’s future in India remains ambiguous
The governor had also informed the public that the RBI‘s circular should not be referred to from this point on. Still, it is the RBI’s attitude that one must observe when dealing with cryptocurrencies in India, as the RBI has made its hostile intentions known. This only added to the general sense of uncertainty and uneasiness permeating throughout the nation, as local investors continue to chomp at the bit to have the mainstream usage of cryptocurrencies be made completely legalized. Furthermore, the possibility of another ban being eventually administered is not out of the question either.
For his part, Das had informed the banks to keep operating as per the pre-existing measures of due diligence, particularly when dealing with clients wanting anything to do cryptocurrency. The RBI has also listed both terrorism financing and money laundering as the reasons for its hesitation, as it believes cryptocurrencies can be utilized for these dangerous purposes. In related news, the bank has also been simultaneously considering the possibility of implementing a CBDC (central bank digital currency) for the foreseeable future.