At the recent 19th meeting of the FSDC [Financial Stability and Development Council] on Tuesday, the country’s finance minister ‘Arun Jaitley’ specified ‘the associated problems and challenges’ of crypto assets and cryptocurrencies, among other things, in line with an official press release issued by the govt’s Press information Bureau.
In the discussion, the council was briefed on the “deliberations” by a high-level committee chaired by the secretary of economic affairs to return up with some appropriate legal framework to ban use of personal cryptocurrencies within the country.
While the status of any framework for the ban is presently unclear, if it comes into effect it might likely rule out the overall general use of cryptocurrencies by the country’s citizens for exchange and trading. However, the formulation would seem to let the country unclear to launch a central bank digital currency [CBDC], as has antecedently been proposed.
Earlier in August, RBI [Reserve Bank Of India] the country’s major central banking authority, indicated it absolutely was researching a potential introduction of a rupee-backed CBDC to chop its annual bill of nearly $90 Mln for printing physical money.
Despite the negative slant on cryptocurrencies at the meeting, it conjointly saw discussion of an idea to “encourage” the employment of distributed ledger technology [DLT].
Already this year, the National institution for Transforming India, widely referred to as ‘NITI Aayog,’ stated that it was trying to develop a proof-of-concept to explore blockchain in key sectors together with education, health and agriculture.
The meeting comes as the crypto ecosystem in India is already in crisis following an April’s order by the RBI that prevented domestic banks from providing services to crypto exchanges within the country.
Since then exchanges are seeking ways to keep their businesses from failing, together with launching crypto-to-crypto trading. However, Zebpay, once the major cryptocurrency exchange by trading volume within the country, shuttered its trading services last month.
Furthermore, last week, a crypto ATM installed by the Unocoin exchange was confiscated by police and its co-founder was arrested.
Legal petitions from several exchanges to overturn the RBI’s existing ban is presently being heard at the country’s supreme court.