During the Winter Session of Parliament in November-December 2021, the government planned to introduce a bill on cryptocurrencies such as Bitcoin, however, it did not do so. Deputy Governor says the RBI‘s opinions may have caused the crypto law to be delayed.
Deputy Governor Michael Patra of the Reserve Bank of Australia stated on Wednesday that the RBI’s opinions may have caused the crypto law to be delayed.
“The RBI’s stance on cryptocurrency is well-known. “I believe that is one of the viewpoints that has caused a bill on that issue to be postponed, but we will engage in a fair debate on that subject and look at both sides of the debate,” Patra said at a Pune International Centre event.
The central bank supports a comprehensive prohibition on speculative assets, claiming that they have no underlying value and are a threat to financial stability. On the CBDC, Patra stated that such an instrument already exists at the wholesale level, but that more work is needed at the retail level.
“I believe we will go at a slow pace. By feeling the pebbles, we will cross the river. There are concerns about privacy, as well as concerns about the transmission of monetary policy. “There’s also the question of the overall energy intensity of the process if it’s based on a certain technology,” he added.
According to him, the RBI is moving “very, very slowly” on the issue and would make calibrated advances in the right direction. Former RBI Governor D Subbarao raised worries about privacy on the CBDC front a few weeks ago, claiming that the feature to examine the whole movement of a single unit of the digital currency leaves it vulnerable to being followed, as well as the lack of safeguards like as a data protection law.
“Why should the RBI or the government be aware of how much ice cream I consume on a monthly basis?” or which high-end brands I favor? So there is some unease, and I believe that if you have CBDCs, you must have very strong data protection regulations that are credible not only within the country but also outside of it. As a result, data privacy rules are crucial when granting CBDCs,” he had stated.
“In a country like India where the opposition is very vigorous, there can be fake complaints, or there can be (a) government misusing the data and covering it up. So I can see a lot of political complications coming out of this,” the former governor had said.
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