India's Central Bank May Be Giving up on a 'Crypto-Rupee', Report Claims

The Reserve Bank of India (RBI), India’s central bank, has reportedly shelved plans to launch a central bank digital currency (CBDC) for now, as it “doesn’t want the digital currency” anymore, believes it’s “too early to even think about a digital currency.”

According to local news outlet The Hindu Business, unnamed sources have revealed India’s central bank is no longer looking to launch its own CBDC, but may instead be looking at what other developed countries do, as it doesn’t “have a formal unit for tracking of, and policy-formation on” cryptocurrencies and blockchain technology.

The news outlet’s source was quoted as saying:

The government doesn’t want the digital currency any more. It thinks it is too early to even think about a digital currency.

The RBI initially revealed it was looking into the possibility of launching a cryptocurrency in April of 2018, when it established a group to look into its potential advantages. Reportedly, its idea would be to better control money laundering and cybersecurity threats, among others, through its CBDC.

As CryptoGlobe covered, in October a private panel with India’s finance ministry revealed high ranking officials were considering a national cryptocurrency, although not every official agreed such a token would be a step forward for the country.

Per The Hindu Business the founder of crypto exchange Belfrics, Praveen Kumar, noted that it’s too early for the RBI to “launch [a] crypto-rupee” as more understanding of the cryptocurrency economy is required. Waiting to see how it evolves, he said, is the “right decision.”

Kunal Nadwani, the CEO of uTrade Solutions, claimed government throughout the world will “launch fiat cryptocurrencies, whether out of compulsion or choice,” adding that the ability to tax their citizens in whichever token they choose lets them create fiat-currency based cryptos. Per his words, however, “it will take time before central banks are able to make this transition.”

Notably, local media have also recently reported that an interdisciplinary committee set up by the Indian government is looking into regulating and legalizing cryptocurrencies in the country, although with tough terms and conditions.

Last year, India’s RBI notably used a circular that ordered commercial banks to stop dealing with cryptocurrency-related firms. The move, as CryptoGlobe covered, saw one of India’s largest exchanges by trading volume, Zebpay, shut down.

At the time the crypto community fought back, and saw a missive from the country’s supreme court uphold the RBI’s decision. In late October, the supreme court even asked the government to clarify its stance on cryptocurrencies.

Report: Russian Finance Minister Hints At Allowing Cryptocurrency Trading

  • Finance Minister alluded to the approval of cryptocurrency trading in a bill circulating the Russian Federation
  • Using crypto as a means of payment is still unlikely.

A report by Russian news service Interfax claims that a Ministry of Finance representative hinted at the idea of allowing cryptocurrency trading in the future, despite the country’s current ban on cryptoassets.

Russia Considers Allowing Cryptocurrency Trading

The report, published on June 21, states that Deputy Minister of Finance Alexei Moiseyev told journalists cryptocurrency trading was being considered in a bill circulating the Russian Federation. Moiseyev cautioned that the Ministry of Finance had not reached a conclusion on cryptocurrency, but intimated that trading may eventually be allowed.

Bitcoin Trading Cryptocurrency RussiaRussian Federation debates approving bitcoin trading. | Source: Pixabay

The Deputy Minister explained that the Russian central bank and Ministry of Finance were debating the nuances of cryptocurrency in a meeting held on Friday,  

“We now have a question of determining how much cryptocurrency can be used. There is a range from prohibition to the possibility of purchase. Like foreign currency, it’s possible to buy and sell, but it’s impossible to pay. After a political decision is made on this issue, we will have the responsibility.”

In May 2018 the Russian Federation passed a landmark bill banning the use of cryptoassets for payment, including the ability for Russian citizens to trade crypto.

However, Moiseyev’s recent comments allude to the government considering allowing citizens the right to buy and sell crypto via trading while continuing the ban on its actual use as a form of payment.

FATF Complicates Cryptocurrency Trading

Anatoly Aksakov, head of the Duma Financial Market Committee, called the review of Russia’s cryptocurrency policy a “compromise solution.” He pointed to the recent mandate passed by the Financial Action Task Force (FATF) necessitating Russia draft a revised policy towards cryptocurrency to remain in compliance against money laundering.

On the same day the Russian Ministry of Finance discussed cryptoasset trading, the FATF issued a controversial decision, requiring cryptocurrency exchanges to share user data. The intergovernmental group cited the need for increased regulations to combat money laundering and illicit behavior.

The crypto community responded to the FATF’s decision with overwhelming disapproval. Chainalysis, a data analytics firm, claimed that the mandate would have the opposite effect and ultimately lead to less transparency.