Will RBI launch its own fiat digital currency?

Reserve Bank of India

The RBI has not responded to any of these angry tweets.

According to RBI, consumer protection, market integrity and money laundering are some of the major concerns while dealing with this highly volatile digital asset and the step taken by RBI is also consistent with the position taken by many Central Banks and governments across Asia and elsewhere.

The RBI has repeatedly warned citizens to tread cautiously when it comes to cryptocurrencies. The deputy governor also said that digital currency can also reduce the cost of printing and circulating paper currency. Even launched in 2012, it is now gaining limelight for not so right reasons as desi crypto coins are considered a little dubious, said professor Pradeeptha Sethi, a former banker and expert in financial market infrastructure.

In the Budget speech on February 1, Jaitley had said that cryptocurrencies are not legal and affirmed to eliminate their usage, resulting in what is reported as a "chill" in the trading activity.

This, however, doesn't necessarily mean that any sort of ban on cryptocurrencies will follow.

It also highlighted that the Reserve Bank will issue a report "on the desirability and feasibility to introduce a central bank digital currency" by June 2108.

The more authoritarian regimes make it harder for people to use their own money, the harder people will work to get around those limitations - and, in doing so, create means of financial empowerment that can not be centrally controlled.

India's economic growth, as well as tax collections, are likely to be robust in fiscal year 2018-19, while the National Democratic Alliance (NDA) government in the last leg of its tenure focuses on consolidating reform measures already initiated, senior finance ministry officials said. Now, bitcoin is their target but the best they can do is shut down centralized exchanges. They can not stop this short of shutting down the internet.

After these RBI guidelines, Shetty added that this will exclude India from global crypto revolution.

On a day when authorities arrested a Pune-based bitcoin "entrepreneur" in New Delhi, the Reserve Bank of India directed banks and others to cease all relationships with bitcoin players.

Thursday's announcement raised concerns about the exit options for investors who now hold cryptocurrencies.

The ban will force them to use P2P (peer-to-peer) trading platforms such as LocalBitcoins. Readers should do their own research before taking any actions related to the company.

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