Indian regulators are leaning towards banning private cryptocurrencies like Bitcoin and Ethereum in favor of Central Bank Digital Currencies (CBDCs). Key government institutions consulted on cryptocurrency regulation have concluded that the risks of private cryptocurrencies outweigh their benefits. The government's position aligns with India's adoption of a synthesis paper by the International Monetary Fund (IMF) and Financial Stability Board (FSB) in September 2023, which proposes minimum regulatory thresholds. The Reserve Bank of India (RBI) Governor has emphasized the potential for financial inclusion with CBDCs, and India's CBDC, the digital rupee (e₹), has already gained over 5 million users. The State Bank of India (SBI) has also begun exploring CBDC applications. India's stance on cryptocurrency has evolved over the years, with a ban imposed by the RBI in 2018 being lifted by the Supreme Court in 2020. Currently, cryptocurrencies are not classified as legal tender in India, but the country has established a tax framework for them. The government plans to gradually expand the scope of CBDCs based on data from ongoing pilot projects.



Other News from Today