‘Cryptocurrency is huge risk so we are…’: RBI governor back India’s own digital currency
The Reserve Bank of India (RBI) is maintaining a highly cautious stance toward cryptocurrencies and stablecoins, Governor Sanjay Malhotra said, citing the “huge risk” associated with the assets. Delivering a memorial lecture at the Delhi School of Economics, Malhotra stated, “Stablecoins, cryptos, they have a huge risk, and so we are adopting a very cautious approach towards it.“The Governor’s remarks come at a time when the global crypto market capitalisation has exceeded $4 trillion and US dollar-backed stablecoins have amassed over $300 billion, news agency Reuters cited data from CoinGecko. India’s chief economic adviser V. Anantha Nageswaran had previously highlighted the rising popularity of dollar stablecoins as a potential challenge for global monetary policy in the coming year.
RBI governor’s digital innovation stance remains accommodative
In contrast to its cautious view on private digital assets, Malhotra noted that the RBI remains highly supportive of government-backed digital innovations.“When it comes to digital innovations like UPI (Unified Payments Interface) or digital lending, our stance has been very accommodative and very enabling,” he explained.Malhotra also reiterated the RBI’s preference for its own Central Bank Digital Currency (CBDC) over private stablecoins or cryptocurrencies, a position he affirmed last month at an International Monetary Fund and World Bank event.On a question regarding the future of crypto regulation in India, Malhotra clarified that the government must take the final call.“The government has to take a final view. There is a working group that was set up earlier, and they will take a final call as to how, if at all, crypto is to be handled in our country,” he said.Currently, global crypto exchanges can operate in India after local registration for anti-money laundering compliance, and high punitive taxes are imposed on crypto gains. The RBI’s repeated warnings, however, have already led to a near freeze in official trading between the formal financial sector and cryptocurrencies, the report highlighted.