The Reserve Bank of India (RBI), a longtime critic of private cryptocurrencies, has said that these risks pose immediate risks to customer protection, anti-money laundering and anti-money laundering. terrorist aid.
The central bank’s financial stability report, released on Tuesday, noted that private cryptocurrencies are “vulnerable to fraud and extreme price volatility, due to their highly speculative nature. long-term concerns related to capital flow management, financial and macroeconomic stability, monetary policy transmission, and monetary substitution”.
The views expressed in the report are significant amid the ongoing debates over whether India should ban private cryptocurrencies.
The RBI has, time and again, highlighted deeper macroeconomic concerns caused by the unregulated private crypto market in India. However, the central bank is open to the idea of introducing a Central Bank Digital Currency (CBDC).
The government is in the process of developing a national law to regulate the cryptocurrency market.
Additionally, the rise of private cryptocurrencies globally has made regulators and governments sensitive to the risks involved, the report said.
“New types of illicit funding continue to emerge, including the growing use of virtual-to-virtual layered schemes in an attempt to further make transactions difficult in a relatively easy way, cheap and anonymous,” it commented.