In recent months, the Reserve Bank of India had hinted at the possibility of introducing a state-backed cryptocurrency of its own.
But on Monday, S Ganesh Kumar, RBI’s director, reportedly signaled that the likes of existing virtual currencies, including bitcoin, won’t be allowed in India.
“Our current position on bitcoins is that we will not be using it for any payments and settlements,” Kumar said at a conference in Mumbai. But Kumar said he sees significant potential for blockchain, the technology underlying cryptocurrencies. According to Quartz India, banks in India already rely on blockchain for operations like overseas transactions and international remittances.
Because of their potential misuse for money laundering and fraud, a finance ministry panel made recommendations in August for the ban of virtual currencies.
Recent weeks have also highlighted the potential volatility of cryptocurrencies, with Bitcoin’s price jumping past $7,000, where, according to Coindesk, it held a value of just $700 a coin one year ago.
Cadence is a fintech reporter and writer at Fintech Unltd, where she covers the changing landscape of financial technologies. Previously, Cadence interned at Psychology Today, Business Insider and the Wisconsin State Journal. Cadence is interested in how science and technology intersect with power and culture and is curious about the world we are creating for tomorrow, consciously or not. She graduated from the University of Wisconsin–Madison in 2017 with degrees in Journalism and Chinese. Send tips and story ideas to Cadence at [email protected] You can also follow her on Twitter @cadencebambenek.