India is leaning toward the total prohibition of private cryptocurrencies like Bitcoin and Ethereum in an attempt to regulate risk in its current volatile market.

The government said they will have a preference for Central Bank Digital Currencies (CBDC), as they provide all the benefits of private cryptocurrencies, without having the potential for instability or potential for misuse.

Regulators added that CBDCs don’t necessarily need to meet the goals of financial inclusion often associated with cryptocurrencies. The Reserve Bank of India (RBI) supports CBDCs as this can achieve a safer alternative that can still attain financial inclusion goals usually tied to cryptocurrency.

The Growing Adoption Of CBDC In India

In 2022, India launched its digital rupee, e₹. Introduced with over 5 million users and 16 participating banks, the initiative is gathering great momentum, one that perhaps has the promise to define the future of digital finance in India. The digital rupee is currently in use in targeted programs.

BTC market cap currently at $1.32 trillion. Chart: TradingView.com

According to RBI Governor Shaktikanta Das, this would mean more efficient, securely delivered financial services targeted at resources and vulnerable sections of society. With the pilot projects gaining momentum and succeeding, the Indian government will look towards further increasing the scope for CBDC, not only for domestic use but also in the enhancement of cross-border transactions, which may revolutionize international trade and remittances.

This expansion will further cement India’s position in the global financial landscape; this improvement is also likely to bring about greater economic inclusion and digital financial transformation across most sectors.

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Author: Christian Encila