According to a report published by Quartz on Feb. 4, an Indian governmental committee is worried by the influence that crypto asset can give on the rupee if it is allowable to be used for expenditures. Meanwhile, a New Delhi-based lawyer reveals the RBI’s response to a right to information plea on the ban. It says no research was done and no panel formed by the banking regulator before coming down heavily on the exchanges. The news mentions to management panel led by Indian Economic Affairs Secretary and former Executive Director at the World Bank, Subhash Chandra Garg, which was allegedly made in November 2017.
A nameless source active in the cryptocurrency industry and who allegedly lately met with the committee is cited by Quartz as saying:
A report released by the Bank for International Settlements (BIS) March 2018 had doubts have been possibly boosted Based in Basel, Switzerland, the BIS is a club of sorts for the world’s central banks, and it is typically worried about matters like the constancy of the worldwide monetary system. Along with 59 other central banks, the Reserve Bank of India (RBI) is a member of the BIS. The report informed that there would be a new form of money could one day be distributed by policymakers for errands like settling payments among monetary institutions. At the same time, it cautioned that digital coins might undermine old-style lenders if unfilled extensively to the general public. In 2017, the price of a bitcoin, the world’s best known virtual currency, rose from around $900 at the start of the year to nearly $20,000 by December. This fuelled a boom in trade and a rise in the number of investors in India, subsequently appearing on the Narendra Modi government and the Reserve Bank of India’s (RBI) radar.
The authorities soon made known their uneasiness with virtual currencies and cautioned investors. A few warning signals and conflicting statements later, the RBI finally pulled the plug on cryptocurrency exchanges.
As per the report published in Cointelegraph in December last year, the similar panel had supposedly recommended a new legal outline within the Reserve Bank of India (RBI) that totally prohibitions cryptocurrencies in the country.
Furthermore, the Indian government had made it clear on numerous instances that it does not identify these new-age bitcoins as lawful tender and is improbable to do so. On the other hand, the government is also worried that these currencies may be used for AML, terror bankrolling, or other unlawful dealings, and can also be used to dupe susceptible investors.
The general impact on the monetary system that it is likely to have is still indistinct and it has been a test to persuade them on this particular point.