Just like a few days ago the Central Bank of Nigeria communicated their intention to regulate Bitcoin in the near future, too India plans to regulate Bitcoin.
The governor of the Federal Reserve Bank of India («Reserve Bank of India» or RBI) has made a series of statements about Bitcoin at a meeting earlier this month, raising a debate and making suggestions on its regulation.
Deputy Governor Shri Gandhu gave a speech at a conference held at FIBAC 2015 (Financial Institution Benchmarking and calibration) on August 25 to discuss issues of technological disruption and financial inclusion. At the end of said speech, Ghandi addressed two topics: cryptocurrencies and crowdfunding. On the one hand, he established that this technology has great potential to be disruptive, but added that it could lead to unintended consequences if it was not controlled.
Specifically, Ghandi established the following:
«Digital currencies and crowdfunding can potentially facilitate criminal or anti-social activities such as money laundering, terrorist financing or tax evasion. Although we have not detected any such cases in relation to crowdfunding, there are suspicions that criminal activities have been financed through cryptocurrencies. We must be careful and monitor these types of developments.»
Recognizing that these types of technologies can promote financial inclusion, Gandhi went on to state that cryptocurrencies could help alleviate frictions when carrying out transactions.
The government of India revealed the last year that the RBI was investigating digital currencies. In December 2013, the bank warned to citizens about their use and announced that it would begin to investigate this technology.
On the other hand, Lieutenant Governor Subhash Sheoratan Mundra made a statement to the newspaper The Economic Times of India, suggesting that harmonized regulation between different regulators is necessary to address the volatility and risks associated with criminal activities in relation to digital currencies. These comments were made a few days after RBI Governor Raghuram Rajam emphasized the central bank’s policies regarding digital currencies.
At an event at the State Bank of India, Rajam stated that further investigation was necessary before the central bank decides to take any action, according to a report from The Financial Express.
Rajam determined that this is an issue that needs to be examined, but added that there should be little intervention until the technology is better understood. However, he also stated that these activities needed to be observed, which would mean being much more active in observing it and, when a situation is clearly illegal, notifying the corresponding authorities.
Fountain: Coindesk
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