This shift in stance follows government concerns over the risks posed by private cryptocurrencies, as authorities evaluate the benefits of CBDCs, which they believe can provide similar advantages with fewer risks.
India is currently weighing a potential ban on cryptocurrencies like Bitcoin and Ether while exploring the adoption of a Central Bank Digital Currency (CBDC), according to reports published, October 22, 2024.
Although the exact entities involved in these discussions remain undisclosed, officials have indicated that the risks of cryptocurrencies, including stablecoins, outweigh any potential benefits. “CBDCs can do whatever cryptos do,” one senior official commented.
The Hindustan Times reported on Tuesday that Indian regulators, after consultations with key institutions, are increasingly leaning toward banning cryptocurrencies.
In 2018, the RBI imposed a ban preventing banks from facilitating crypto transactions, a decision that was overturned by the Supreme Court in 2020.
India’s relationship with cryptocurrencies has been marked by a series of policy reversals.
Regulatory History of Crypto in India and the Ban Debate