Cryptocurrencies are widely used and accepted worldwide, but the Reserve Bank of India (RBI) chief has raised concerns about the potential risks they pose to emerging markets. Despite increasing acceptance in other countries, the RBI’s position on cryptocurrencies remains unchanged.
“The central bank’s stance on this (cryptocurrencies) remains unchanged irrespective of who does what,” said Shaktikanta Das, the RBI chief, in response to the first US-listed exchange traded funds being approved to track Bitcoin.
Cryptocurrencies have been repeatedly flagged by the RBI for posing significant risks to macroeconomic and financial stability, as they have no underlying value. Instead, RBI Governor Das highlighted the advantages of central bank digital currencies (CBDCs), known as e-rupee in India, and how they can enable targeted transfers such as those to farmers. The central bank also plans to pilot the e-rupee in new segments of the wholesale space.
The RBI and the National Payments Council of India are working on cross-border transactions using India’s Unified Payments Interface (UPI). Additionally, the central bank is closely monitoring model-based artificial intelligence lending by financial entities.
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In conclusion, the Reserve Bank of India (RBI) has reiterated its unchanged stance on cryptocurrencies, highlighting their concerns about the potential risks and threats posed by these digital assets. Despite the growing popularity and adoption of cryptocurrencies, the RBI Governor’s statement reaffirms the central bank’s commitment to maintaining the stability and integrity of the Indian financial system. As the regulatory landscape around cryptocurrencies continues to evolve, it is clear that the RBI remains cautious and vigilant in its approach towards these digital assets.