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India’s Central Bank is Worried About Crypto Undermining Its Authority

The three-judge bench of India’s Supreme Court reconvened to hear the ‘Crypto vs RBI’ case after the last hearing happened way back in August last year. At the last hearing, there were contentions made about the RBI’s jurisdiction behind exacting a banking ban and the bench had then requested India’s central bank to respond to the exchange’s representation.

As reported by CoinCrunch’s Naimish Singhvi, the RBI, in its reply, said that the institution has the “complete right to operate currency as well as credit system in the nation. The central bank also highlighted that it practised its sole right to secure monetary stability and regulated entities that were exposed to the reputational risks by offering services to the exchanges.

The CoinCrunch CEO stated in a tweet thread –

“RBI cites the example of ‘Libra’ (indirectly) to say that VCs are risk associated and hence the US watchdogs went after Facebook and its plan to launch its own virtual currency. RBI also says Virtual currencies and crypto-assets are terms that can be used interchangeably.”

The Reserve Bank of India couldn’t help contradicting the IAMAI’s place of “cryptocurrency being essential to the blockchain.” Also, despite the fact that it is open to the use of blockchain, the RBI considered digital money as a risk to users. Taking note of its duties, RBI said that it needed to act in light of a legitimate concern for users because “not all can relieve the risk themselves.” Simultaneously, it advanced the possibility of RBI-upheld Digital Currency, referring to the 2016 Ratan Watal Committee report.

“RBI says it encourages the use of (blockchain) technology but in a manner that it ‘does not undermine the faith and trust in digital payments’.”

In spite of the fact that there have been dialogues in the nation with respect to the condition of digital money, numerous industsry chiefs have recommended alert to financial capitalists. The RBI has even scrutinized the duties of IAMAI members as it is supporting exchanges to outside trades, taking note of ‘they aren’t genuinely following accepted procedures as delineated by IAMAI.’ The value instability makes it hard for the RBI to implement consistent laws like the FEMA and LRS, regardless of whether the beneficiary is identified as an outsider.