THREE DAYS after a Prime Minister-chaired meeting arrived at a consensus that future steps by the government in the field of crypto currency will be “progressive and forward-looking”, Reserve Bank of India Governor Shaktikanta Das once again strongly urged caution and voiced serious concerns.
“I would only like to say that when the RBI as the central bank of the country, which is entrusted with the responsibility of maintaining financial stability, after due internal deliberation says that there are serious concerns on macro-economic and financial stability, there are deeper issues… I’m yet to see serious, well-informed discussion in the public space on these issues,” Das said at the SBI Banking Conclave Tuesday.
This is not the first time the RBI has struck a cautionary note.
At a Business Standard event last week, Das had said, “Cryptocurrencies are a serious concern to RBI from a macroeconomic and financial stability standpoint. The government is actively looking at the issue and will decide on it. But as the central banker, we have serious concerns about it, and we have flagged it many times.”
World over, regulators are trying to catch up with the rapidly expanding crypto currency market. In India, both financial sector regulators, RBI and SEBI, are wary given the rise in the volume and value of transactions, and its possible impact on economic, financial stability.
On Tuesday, the RBI Governor said 80 per cent of the crypto accounts are small accounts of Rs 1,000 and Rs 2,000 and there are even accounts of Rs 500. “Yes, the value of transactions and trading has gone up, but the number of accounts as I said is exaggerated. And I stick to that,” he said.
On Monday, industry executives told the Parliamentary Standing Committee on Finance there were around 15 million active subscribers on their exchanges in India, with the total outstanding value pegged at around $6 billion, sources said. A recent advertisement by the Internet and Mobile Association of India and crypto exchanges, had claimed, “Crores of Indians have invested over Rs 600,000 crore in crypto assets.”
In the PM-chaired meeting on Saturday, there was acknowledgement that this was an evolving technology, and the government would keep a close watch and take proactive steps. Further, government sources said, since the issues cut across individual countries’ borders, it was felt that it would also require global partnerships and collective strategies.
On the technology part, Das said the blockchain technology is 10 years old and can grow without cryptocurrencies too. “The discussions are that, you know, it’s a new technology we should capitalise on it, and I have said it earlier this technology is more than 10 years old, the blockchain technology is nothing new… The technology can grow and will grow without cryptocurrencies or whatever name you use to describe cryptocurrencies,” he said.
Amid indications the government will introduce a Bill on cryptocurrencies in the winter session of Parliament, the Standing Committee on Finance had called crypto currency associations and industry experts on Monday to discuss the “opportunities and challenges” in this field.
“There were a lot of issues discussed around cryptocurrencies. Everyone (from industry) gave their views. Now we have to wait for the government. The government is going to bring a Bill to Parliament in this Winter session. Once that Bill is referred to the Standing Committee, then we get an idea what it states, and how the Bill will take care of it,” a source who did not wish to be named said.