Indian regulators have reportedly supported banning private cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) and pushing for the use of Central Bank Digital Currency (CBDC). This development reinforces India’s CBDC push, which started years ago.

The country’s financial institutions argue that CBDCs offer safer and more efficient alternatives for promoting financial inclusion. In their opinion, the risks posed by private cryptos, including stablecoins, far outweigh their potential benefits.

Indian Authorities Champion for CBDCs

According to sources close to the matter, Indian regulators, including the Reserve Bank of India (RBI), have consulted widely with the government as it prepares a discussion paper on the regulation of digital currencies in the country. These consultations have resulted in a consensus advocating for the prohibition of private cryptocurrencies.

“CBDCs can do whatever cryptos do. In fact, CBDCs have more benefits than cryptos, minus the risks associated with private cryptocurrencies,” Hindustan Times reported, citing one government official, who requested anonymity.

The anonymous source also explained that private cryptocurrencies’ volatility and instability make them unsuitable for long-term use. This applies to India in particular, where financial stability and inclusion are high on the agenda.

However, the comparison of CBDCs with Bitcoin and Ethereum has been criticized by industry leaders, including Sumit Gupta, the CEO of Indian crypto exchange CoinDCX.

“I humbly disagree with the above statement. CBDCs and crypto assets serve different purposes and shouldn’t be viewed as competitors. Instead, they complement each other. By leveraging advancements in the crypto space, we can enhance the efficiency, security, and inclusivity of CBDCs, making them more adaptable for real-world applications,” Gupta

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Author: Lockridge Okoth