RBI Monetary Policy 2021: The central bank has addressed its views to the government, and it is up to investors to make “extremely cautious decisions with regard to their own investments,” according to RBI Governor Shaktikanta Das.
The Reserve Bank of India (RBI) has expressed serious concerns about cryptocurrencies to the government, and its stance on digital coins has not changed, according to Governor Shaktikanta Das on June 4 following the release of the RBI monetary policy committee’s (MPC) meeting’s results.
Das’ comments come only a few days after the RBI published a clarification warning clients against leveraging their services to trade in cryptocurrencies, which have sparked a surge of interest among Indians despite the fact that they operate in a grey area.
“We have major concerns on cryptocurrency, which we have conveyed to the government. With regard to advice to investors, well, central banks don’t give any investment advice. It’s up to each investor to make his own appraisal, to do his own due diligence and take a very careful call with regard to his own investments,” Das made the remarks during a press conference following the release of the RBI monetary policy committee’s (MPC) meeting’s results.
“There is no change in our position. Our circular clarifies our position very well,” Das stated this in answer to a question on the company’s May 31 circular, which some saw as a reference to bitcoin transactions.
The RBI became aware that certain banks were referring to its 2018 circular prohibiting banks from transacting in cryptocurrency even after it was overturned, and the central bank intended to “set the record straight,” according to Das.
The Reserve Bank of India clarified on May 31 that banks and other regulated companies cannot use its 2018 cryptocurrency circular because it was overturned by the Supreme Court in March 2020.
The RBI has requested banks to conduct customer due diligence in accordance with laws regulating Know Your Customer, anti-money laundering, counter-terrorist financing, and regulated entity requirements under the Prevention of Money Laundering Act.
A cryptocurrency is a kind of digital money that is decentralized and based on blockchain technology, which is a distributed database that can be accessed by a network of computers. Some of the most popular cryptocurrencies include bitcoin, ethereum, litecoin, and dogecoin.
The government has yet to express its opinions or policies on cryptocurrencies, but that hasn’t stopped Indians from investing in the global crypto wave.
Around 1.5 million Indians have invested Rs 15,000 crore in cryptocurrencies, according to statistics from crypto exchanges. In the blockchain and cryptocurrency space, there are over 350 firms. The need for crypto exchanges like WazirX, CoinSwitch Kuber, and others has skyrocketed.
The government has suggested a cryptocurrency and regulation of official digital currency laws for 2021, which would make all digital token transactions illegal, although it is unclear when the bill would be submitted in Parliament.