Prime Minister Narendra Modi chaired a meeting on the way forward on the issue on Saturday, amid concerns about misleading claims of huge returns on cryptocurrency investments, with government sources asserting that such unregulated markets cannot be allowed to become avenues for “money laundering and terror financing.”
The group concluded that attempts to deceive the youth by over-promising and non-transparent advertising should be prevented, according to the sources, implying that tough regulatory action is on the way.
“Because this is a developing technology, the government will keep a close eye on it and take aggressive measures. There was also agreement that the government’s actions in this area would be progressive and forward-looking “according to a source
Sources noted that the government would continue to engage aggressively with experts and other stakeholders, adding that because the issue transcends geographical borders, global alliances and collaborative measures are expected.
The meeting on the future of bitcoin and associated concerns was quite in-depth.
“It was also the result of a consultation process, as the RBI, Finance Ministry, and Home Ministry conducted extensive research and contacted experts from all around the country and the world. Examples and best practises from throughout the world were also examined “According to the source.
The Reserve Bank of India has often stated its opposition to cryptocurrencies, claiming that they represent a severe danger to the country’s macroeconomic and financial stability. It has also questioned the number of investors trading on them, as well as their alleged market value.
On Wednesday, RBI Governor Shaktikanta Das repeated his opposition to cryptocurrencies, claiming that they pose a severe danger to any financial system since they are uncontrolled by central banks.
His remarks came ahead of the release next month of the RBI’s internal panel report on the sensitive matter.
The RBI circular prohibiting cryptocurrency was declared null and void by the Supreme Court in early March 2020.
Following this, on February 5, 2021, the central bank established an internal panel to develop a digital currency paradigm.
The RBI declared its intention to create an official digital currency in response to the rise of cryptocurrencies such as Bitcoin, which the central bank has expressed worry over.
In the last decade or so, private digital currencies, virtual currencies, and cryptocurrencies have grown in popularity. Regulators and governments have been skeptical of digital currencies and concerned about the risks they entail.
It should be mentioned that on March 4, 2021, the Supreme Court overturned an RBI circular dated April 6, 2018, barring banks and organizations regulated by it from offering virtual currency services.