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India’s Central Bank isn’t Adopting Bitcoin for Payments or Settlements

Last Updated March 4, 2021 5:01 PM
Samburaj Das
Last Updated March 4, 2021 5:01 PM

An official for the Reserve Bank of India, the country’s central bank, has reaffirmed the authority’s stance in avoiding cryptocurrencies like bitcoin.

A director at the Reserve Bank of India (RBI) has drawn a line on the central bank’s current stance on bitcoin, predictably stating the authority isn’t interested in adopting the cryptocurrency.

RBI director Ganesh Kumar was speaking at a banking event when he fielded a query about bitcoin from the audience. In a statement reported by Money Control , the official stated:

Our current position on bitcoins is that we will not be using it for any payments and settlements…though the technology underlying cryptocurrencies [the blockchain] will not end.

India’s central bank is also researching a “fiat cryptocurrency” that will deliver a digital rupee, a digitized alternative to India’s fiat currency. As Kumar suggests, the central bank will not be using bitcoin for the initiative, a stance that was recently revealed by RBI executive director Sudarshan Sen.

“[In] regards to non-fiat cryptocurrencies…we are not comfortable,” Sen stated at a FinTech conference in September. “Bitcoins for example. That’s a private cryptocurrency.”

As bitcoin permeates into the mainstream, gaining awareness and adoption in society, central bankers are increasingly fielding questions about decentralized cryptocurrencies that are independent of state controls. Such is their aversion that central banks around the world are working toward developing their own central bank-issued digital currencies, issued under their control. Singapore, China, Canada, and Russia are among a handful of notable examples.

Meanwhile, the RBI’s official stance on bitcoin remains a public notice advising retail investors and citizens to be wary of bitcoin investments or usage in the country, a rehash of a similar statement from December 2013. The recent boom in adoption – India’s finance minister Arun Jaitley underlined a ‘notable growth’ of the country’s bitcoin market this year- has since led to Indian authorities establishing a digital currency committee to develop a framework for the legal and regulatory future for cryptocurrencies in India.

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