Though it is not for the first time that the Reserve Bank of India has shown its views to public, it is definitely for the first time that it has entirely covered the cryptocurrency space to give an idea about what it thinks with regard to digital currencies. The governor and two deputy governors made statements about Bitcoin during gatherings and gave their views.
Nonetheless, the Reserve Bank of India (RBI) deputy governor R Gandhi’s 25th August speech at the FIBAC 2015 banking conference in Mumbai focused on technological disruption and financial inclusion. During his speech he also addressed two subjects e.g. cryptocurrencies and crowdfunding which are fast becoming mainstream things for the economy.
Talking about the cryptocurrencies he said that these have the potential to be disruptive; however, they could also have undesirable consequences if left unchecked. He was quoted saying that digital currencies and crowdfunding have the potential to support criminal, anti-social activities like money laundering, terrorist funding and tax evasion.
According to Gandhi while they do not have any reported instances of crowdfunding in this respect, cryptocurrencies have been widely suspected to finance criminal activities and they have to be carefully and critically watching these developments. He also acknowledged that the technology can assist financial inclusion.
Nonetheless, Gandhi went on to say that cryptocurrency can help alleviate transaction settlement concerns. Similar views were shared by Deputy Governor Subhash Sheoratan Mundra who said that global coordination among regulators is needed to address the volatility and crime-related risks of digital currencies.
More Investigation is needed for any Action Says RBI Governor
He was quoted saying that these are the kinds of global innovations and by very nature and design; it will be something which would need a global coordination rather than a framework which can be location specific. Looks like there are similarities in what the various officials of the RBI think about Bitcoin as even the Governor thinks on the similar lines.
Earlier, in a program RBI Governor Raghuram Rajan remarked on the central bank’s policy toward digital currencies and said that more investigation is necessary before the central bank decides to take any action. He was quoted saying that they have to examine and he would say the bank shouldn’t intervene strongly until it understands cryptocurrencies better.
Rajan had concluded that the bank has to watch it, which means it has to be much more active in gathering market intelligence and in situation where it is clear that it is illegal, to bring it to the notice of law enforcement authorities.
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