RBI Backed CBDC Likely To Be In Crypto Bill: Official

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New Delhi: The proposal for a central bank digital currency (CBDC) backed by the country’s banking regulator could be included in the upcoming bill to regulate cryptocurrency, a senior government official told ET.

Calling the Bill Centers a response to central bank concerns about macroeconomic stability, the official familiar with discussions on future legislation said the government’s response was not to ban cryptocurrencies but rather to provide cryptocurrency through the RBI.

The bill, which is expected to be introduced in the winter session of parliament from Monday, also aims to ensure that the Reserve Bank of India (RBI) does not lose control of the country’s monetary economy while downplaying speculative betting around cryptos, the source said.

Unregulated cryptocurrencies can destabilize the macro economy and create large speculative bubbles. To that extent, the RBI is correct, the person added.

The Cryptocurrency and Official Digital Currency Regulation Bill, 2021, due to be presented in the next session of Parliament, has sparked a stir across the industry as Lok Sabha’s website in its briefing on the legislation states that it seeks to ban all private cryptocurrencies in India “but allows” certain exceptions to promote the underlying technology and its uses.

In recent days, the price of the country’s major cryptocurrencies has seen strong swings, with investors waiting for greater regulatory clarity.

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Recognizing that crypto and blockchain are here to stay around the world, the official said India will take a phased approach to digital currency.

Governments’ approach to crypto can be cautious, measured and scalable, we’ll start with a CBDC. (the central bank) will initiate this and in the future there may be private stablecoins authorized and regulated by the RBI, the person said, while noting that functionally and theoretically they (cryptocurrencies) disintermediate conventional players. financial markets like bank accounts or credit cards. and play that role.

Earlier this month, Prime Minister Narendra Modi chaired a high-level cryptocurrency meeting with officials from the RBI, the Ministry of Finance and the Securities and Exchange Board of India (Sebi). Quoting a person familiar with the discussions at the meeting, ET said that the general opinion within government was that the measures taken should be proactive, “incremental and forward-looking”, as (crypto) is a evolving technology.

Subsequently, the Standing Parliamentary Finance Committee met with representatives, stakeholders and experts from the crypto industry. Panel chair Jayant Sinha told ET that the committee did not take a position on cryptocurrencies, adding that the industry is claiming 15 million registered users with total investments of Rs 600 crore.

Concerns are growing about the growing popularity of cryptocurrency as an investment.

“It is important that all democratic nations work on this (cryptocurrency) and ensure that it does not end up in the wrong hands, which can spoil our youth,” the Prime Minister said at the Sydney Dialogue last week.

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