Reserve Bank of India is still keen on banning crypto

India’s Finance Minister Nirmala Sitharaman told the Lok Sabha on Monday that the RBI is of the view of banning cryptocurrencies.

The Finance Minister of India, Nirmala Sitharaman, told the Lok Sabha on Monday that the Reserve Bank of India is eager to ban cryptocurrencies. She responded to a question by VCK MP Thol Thirumavalavan, who asked to gain information on whether the RBI had registered concerns over the adverse impact of cryptocurrencies on the Indian economy. He also asked Sitharaman to clarify whether she had recommended enacting appropriate legislation to control the use of cryptocurrencies in the country.

“RBI is of the view that cryptocurrencies should be banned,” Nirmala Sitharaman answered. “RBI has registered its concern over the adverse impact of cryptocurrencies on the Indian economy. RBI has mentioned that cryptocurrency is not a currency as every modern currency and must be issued by a Central Bank/Govt.”

However, the Finance Minister highlighted that any legislation to regulate or ban cryptocurrencies would take effect only after significant “international cooperation” in assessing risks and benefits and developing a common classification.

On November 13, 2021, prime minister Narendra Modi chaired a meeting aimed at pushing cryptocurrencies and flagged the issue of misleading non-transparent advertising, regarding the same stating that the crypto markets cannot be allowed to be the way for money laundering and terror financing; sources indicated that the center would continue to engage with all stakeholders. 

Speaking publicly on cryptocurrencies for the first time during his keynote address at the Sydney Dialogue 5 days later, the PM urged all democratic countries to work together to ensure that cryptocurrencies do not fall into the wrong hands.