Cryptocurrency, India tightens on the industry to favor state currency?

Cryptocurrency, India tightens on the industry to favor state currency? A few brief reflections on what is happening on the subcontinent ...

Cryptocurrency, India tightens on the industry to favor state currency? - rbi

During the past week the news flow relating to the interruption of organisers' activities Indian cryptographic notes from various sources have leaked speculation about a potential prohibition of cryptographic digital assets in the subcontinent, sending the markets into a panic and causing a decline in the Bitcoin prices on the threshold of 6.600 dollars. With the return of greater common sense, and while the dust continues to settle, the Reserve Bank of India he finally believed it was appropriate to intervene to make some clarity.

The statements of the Central Bank

The statements of the RBI (the Indian central bank) on cryptocurrency are included in the recent report "Statement on Developmental and Regulatory Policies", published on April 5. Inside, a section dedicated precisely to the benefits and potential risks of cryptocurrencies, in which the reflection according to which emerges

virtual currencies have the potential to improve the efficiency and inclusiveness of the financial system. However, virtual currencies, referred to in various ways as cryptographic currencies and crypto assets, raise concerns, among others, about consumer protection, market integrity and money laundering.

The report also states that with immediate effect

entities regulated by the RBI must not negotiate or provide services to any individual or commercial entity that deals with or regulates virtual currencies.

But what does it mean? First, that the Indian government It is NOT prohibiting encryption in the country. We remember how, first of all, the RBI is a regulatory body which, as a central banking authority, controls monetary policy and establishes regulation for those entities within its jurisdiction, namely banks.

So, be careful not to confuse what has been decided by the banking institution with the possible moves of the government. However, although important and potentially impacting on the market, the announcement of the RBI contradicts the statements of the Indian prime minister Narendra Modi, which considers the blockchain and cryptocurrencies potentially capable of having a "profound impact on the way we live and work".

Because the central bank wants to tighten on cryptovelutes

Ma why the central bank is so strict on cryptocurrencies? Perhaps the answer is in an interview with the Times of India, in which Deputy Governor B. Panungo said that a report on the feasibility of a central bank digital currency will be presented by the end of June.

RBI's interest in its own cryptocurrency is due - as can be read in the interview - to rapid changes in the panorama of the payments sector, together with factors such as the emergence of private digital tokens and the increase in management costs of paper / metallic money.

In short, could the RBI want to discourage other cryptocurrencies to favor its own?