India Mulls Crypto Ban, Considers CBDC Adoption

India is considering adopting Central Bank Digital Currency (CBDC) in place of a possible ban on private cryptocurrencies like Bitcoin.

India is currently weighing a potential ban on cryptocurrencies like Bitcoin and Ether while exploring the adoption of a Central Bank Digital Currency (CBDC), according to reports published on Tuesday, October 22, 2024.

This shift in stance follows government concerns over the risks posed by private cryptocurrencies, as authorities evaluate the benefits of CBDCs, which they believe can provide similar advantages with fewer risks.

India Crypto Ban Talks and CBDC Expansion

The Hindustan Times reported on Tuesday that Indian regulators, after consultations with key institutions, are increasingly leaning toward banning cryptocurrencies.

Although the exact entities involved in these discussions remain undisclosed, officials have indicated that the risks of cryptocurrencies, including stablecoins, outweigh any potential benefits.

“CBDCs can do whatever cryptos do,” one senior official commented. They added, “but without the risks,” underscoring growing support for the digital rupee over decentralized digital assets.

In parallel, the Reserve Bank of India (RBI) has been actively promoting the adoption of its retail CBDC.

Despite these efforts, current transaction volumes—around 18,000 daily—are still well below the RBI’s target of one million by year-end.

The RBI is working on new features, including offline transactions and integrating the digital rupee with the popular Unified Payments Interface (UPI), to boost adoption.

Ajay Seth, India’s Secretary of Economic Affairs, revealed in July that an inter-ministerial group, including key institutions like the RBI and the Securities and Exchange Board of India (SEBI), is working on a policy paper regarding cryptocurrencies.

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