RBI Financial News

The RBI governor said that cryptocurrencies pose risks for financial stability.(File)

Initiatives to gather data on crypto need to be undertaken quickly before any regulations are formed so that "wrong set of prescriptions" are not issued, a top Indian central banker has said.

Having tested the wholesale usage of its central bank digital currency (CBDC), the Reserve Bank of India (RBI) is preparing to conduct the retail pilot of the “digital rupee.” The pilot should launch within a month.

Cryptocurrency markets worldwide have been battered with billions of dollars being wiped out but India managed to stay relatively unscathed thanks to a cautious approach of the government and the RBI.

Industry estimates put exposure of Indian investors to crypto assets at only 3 per cent.

RBI) on Friday released its concept note for central bank digital currency (CBDC), which was announced by the Finance Minister Nirmal Sitharaman in Parliament during her budget speech in February. The RBI clarified that the concept note aims to create awareness about CBDC and features of the digital rupee (e₹). It explains the objectives, choices, benefits, risks of CBDCs in India. It discusses technology and design choices, possible uses of Digital Rupee, issuance mechanisms and examines the implications of introduction of CBDC on the banking system, monetary policy, financial stability, and privacy issues. The RBI will soon commence pilot launches of CBDC for specific use cases. As the extent and scope of such pilot launches expand, RBI will continue to communicate about the specific features and benefits of CBDC, from time to time.

Such transactions, though perfectly kosher in Dubai, which wants to position itself as the world's crypto capital, can come back to haunt the property owners, most of whom are unmindful of the regulatory and legal pitfalls ahead. Little do they realise that copies of their passports, those of their family members or close relatives in whose name the property is registered could someday fall into the hands of the Indian Income Tax (I-T) Department and Directorate of Enforcement (ED). With the Reserve Bank of India (RBI) imposing a shadow ban on cryptos and the finance ministry almost taxing the asset to death, many high net-worth individuals (HNI) investors have moved their cryptos to Dubai and other financial centres.

Reserve Bank of India (RBI) said that the central bank will launch its digital currency as a pilot project this year. Addressing the India Ideas Summit, Sankar said that Central Bank Digital Currency (CBDC) is the most efficient system for cross-border payments. Though, it reiterated that RBI aims to give viable alternatives and not going for a cashless society. Finance Minister Nirmala Sitharaman had announced the launch of CBDC during her union budget speech, which was tabled earlier this year. Pratik Gauri, Co-founder & CEO, 5ire said that as cautious as the government has been about both VAs and digital currency, it is a novel step to be taken by a central bank.

The Reserve Bank of India (RBI) is in talks with fintech companies and state-controlled banks about a trial run of a central bank digital currency (CBDC), local publication Moneycontrol reported on Sept. 5. An unnamed public sector bank official told the publication that the trial may precede an RBI launch of a CBDC this fiscal year.

In a rising interest-rate world, many financial sectors and products including private equity and cryptocurrencies will face an existential crisis, according to James Grant.

RBI Governor Shaktikanta Das has lashed out at crypto assets once again. In an interview with ET Now, Das reiterated his concerns over the crypto assets. The RBI chief said, "cryptos may lead to dollarization of the developing countries like India as the prices of crypto tokens are mostly denominated in dollars." He said that this will create serious financial instability in the country. The RBI governor also added that cryptos pose a serious risk for small investors who are prone to lose their money. «This may favour me if I am sitting in the other part of the world, but not here,» he said. «This will work in the favour of an advanced economy,» he added.

Crypto technology as a means of payment is logical extension of fintech companies but challenges lie on its usage as an asset class and an alternative to currency, Minister of State for Electronics and IT Rajeev Chandrasekhar said on Thursday. Speaking on sidelines of Fintech Festival, Chandrasekhar said the whole world is grappling with the issue of crypto and has to come to an understanding on the ways and means to address it. «Crypto as a means of payment is logical extension of fintech but crypto as an asset class and crypto as a substitute for currency is an area with which all currencies of the world and all regulators of the world are struggling with. We will find our way with prudence, caution. We have completely clear objective as to who will do crypto in India. The government has said that RBI will do crypto the digital rupee as first measure and then we see how market evolves,» Chandrasekhar said. Finance Minister Nirmala Sitharaman has said that the RBI has expressed concerns over cryptocurrencies noting that they should be prohibited as they can have destabilising effect on the monetary and fiscal stability.

Nirmala Sitharaman's written response in Parliament again brought the 'spotlight' to crypto assets or virtual currencies (VCs) as she called for 'global collaborations' to prohibit these assets. However, the industry, as always, is reading too much between the lines, taking out the positive for the industry with some silver lining for the stakeholders. "Cryptocurrencies are by definition borderless and require international collaboration to prevent regulatory arbitrage. Therefore any legislation for regulation or for banning can be effective only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards," FM's reply said.

Nirmala Sitharaman said that cryptocurrencies could be banned or prohibited only after significant international collaboration on the risks, benefits, evolution of common taxonomy and standards. Sitharaman's statement on cryptocurrencies or Virtual Currencies (VCs) in Parliament was in response to a five-pointer question by Thirumavalavan, a member of Parliament from Tamil Nadu's Chidambaram. The questions were about the Reserve

cryptocurrency — an explicit prohibition — the Indian government wants a global collaboration if such a ban or prohibition has to be put into effect. Addressing queries pertaining to cryptocurrencies in the Lok Sabha today, finance minister Nirmala Sitharaman said, “Cryptocurrencies are by definition borderless and require international collaboration to prevent regulatory arbitrage. Therefore, any legislation for regulation or for banning can be effective only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards.” The RBI has time and again pointed out the problems with digital assets questioning their underlying fundamentals and use cases. The RBI governor Shaktikanta Das has gone on the record to even call it a “real danger” in the annual report of the central bank.

Finance Minister Nirmala Sitharaman on July 18 said the RBI has expressed concerns over cryptocurrencies saying that they should be prohibited as they can have destabilising effect on the monetary and fiscal stability.

The Reserve Bank of India (RBI) has recommended to the government that it should frame regulations for cryptocurrencies and prohibit them.

India’s crypto investors are a clueless lot. On one hand, the Reserve Bank of India (RBI) is on a public campaign calling crypto a "clear danger" that has no underlying assets, cautioning investors not to gamble. On the other hand, the government is silent on its legality but busy collecting taxes. Meanwhile, investors desperately look for clarity.

Here are the top stories this evening:

ODI) route to bet on cryptocurrencies abroad with the liberalised remittance facility (LRS) — the customary window for offshore investments by wealthy residents — shut for these exotic digital assets. These ultra-high net worth individuals are using a non-banking finance company — preferably an existing local entity — to sponsor an overseas investment company, a wholly-owned subsidiary, in a financial centre like Dubai. The funds used to capitalise this foreign arm is invested in securities and assets abroad, including cryptos sold on trading platforms outside India. «Unlike the LRS Scheme which restricts direct investment in the financial services sector overseas, the ODI scheme permits regulated financial services companies to invest in the financial services sector under approval route. Such investment is subject to prior approval from the relevant financial regulators in India and overseas. Once a duly approved overseas direct investment is made in a financial services company overseas, such entity should be able to undertake business in accordance with the laws applicable in the relevant overseas jurisdiction,» said Moin Ladha, partner at the law firm Khaitan & Co.

consultation paper on cryptocurrencies, Reserve Bank Deputy Governor T Rabi Sankar on Thursday said the soon-to-be-introduced central bank digital currencies (CBDCs) can «kill» whatever little case that exists for private virtual currencies like Bitcoin. Sankar also attacked 'stable coins' which are pegged to a particular currency. The RBI has been vehemently opposed to cryptocurrencies like Bitcoin, saying there is no underlying value for such instruments which are essentially speculative in nature. It has gone public with the same, even as the government has yet to make its stance clear. Earlier this week, the Department of Economic Affairs in the Ministry of Finance had said it will soon be coming out with a paper on such private cryptocurrencies.