Governor Sanjay Malhotra reveals why RBI is concerned about cryptocurrencies: ‘Can hamper…'
Speaking to reporters during an interaction after announcing the RBI MPC decisions, Sanjay Malhotra touched upon the topic of cryptocurrencies. He was asked about them in the backdrop of the Supreme Court's observation on crypto currency last month.
Malhotra said that there has been no new development on cryptocurrencies.
'There is no new development as far as crypto is concerned. A committee of the government is looking after this.'
'Of course, as you are aware, we are concerned about crypto because that can hamper financial stability and monetary policy,' Malhotra said.
The Supreme Court in an observation on May 19 asked the Centre why it is not making a clear cut policy on cryptocurrency.
'Why does Centre not come out with a clear cut policy on regulating cryptocurrency,' a bench of Justices Surya Kant and N Kotiswar Singh asked.
The remarks from the Supreme Court came when it was hearing a bail plea of an accused who was held for illegal Bitcoin trade in Gujarat. The accused, Shailesh Babulal Bhatt, had moved top court for bail.
The SC termed Bitcoin trade as an illicit trade more or less like "hawala" business.
On May 5, the top court said trading in Bitcoin in India was like "dealing with a refined way of Hawala business" as it lamented the Centre's inability to come up with a clear regime on regulating virtual currency so far.
India is currently working on a discussion paper for cryptocurrencies and an inter-ministerial group (IMG), comprising officials from RBI, Sebi and finance ministry, is looking into global norms.
In absence of any regulation, cryptocurrency is not yet illegal in India.
The discussion paper will give the stakeholders an opportunity to give their views before India decides on its policy stance on cryptocurrencies.
In 2022, the government announced a flat 30 per cent tax on gains arising from cryptocurrencies. Taxing income from cryptocurrencies does not necessarily and explicitly legalise cryptocurrencies.
Currently, crypto assets are unregulated in India.
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