Cryptos: No proposal to recognize Bitcoin; RBI pushes for digital currency
Virendra Pandit
New Delhi: Finance Minister Nirmala Sitharaman on Monday announced that the government has no proposal to recognize Bitcoin as a currency in India.
She also informed the Lok Sabha that the government does not collect data on Bitcoin transactions.
Her deputy, Minister of State for Finance Pankaj Choudhary told the Lower House that the ministry has received a proposal from the RBI in October for an amendment to the RBI Act, 1934 to enhance the definition of ‘bank note’ to include currency in digital form.
The RBI is working out a phased implementation strategy for introducing the Central Bank Digital Currency(CBDC) with little or no disruption, he said.
Bitcoin, a digital currency launched in 200 by an unidentified group of programmers as a ‘cryptocurrency’ and an electronic payment system, allows people to buy goods and services and exchange money without involving banks, credit card issuers, or other third parties. It is the first decentralized digital currency where peer-to-peer transactions take place with no intermediary.
In India, the government plans to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill 2021 in the ongoing Winter Session of Parliament. The Bill seeks to ban all but a few private cryptocurrencies to promote underlying technologies while allowing an official digital currency proposed by the RBI.
On inflation, she said exogenous factors like the increased international prices of crude oil and edible oils handled the price rise as these affected domestic inflations because of India’s import dependence on these items.
Meanwhile, Chaudhary said the government is examining all aspects of the RBI-proposed CBDC and working out a phased implementation strategy for its introduction. “It may provide significant benefits, such as reduced dependency on cash, and reduced settlement risk. It could also lead to a more robust, efficient, trusted, regulated, and legal tender-based payments option. There are also associated risks which need to be carefully evaluated against the potential benefits.”
RBI Governor Shaktikanta Das had recently cautioned against allowing cryptocurrencies, saying they are a serious threat to any financial system since they are unregulated by central banks.
RBI Deputy Governor T Rabi Sankar had, in August, said that India is thinking of a phased introduction of a digital currency, adding the time for them is now. China has already started a trial run for its digital currency, while the Bank of England and the US Federal Reserve are also looking at it.
