The Reserve Bank of India (RBI) in its financial stability report has said that private cryptocurrencies pose immediate risks to customer protection and anti-money laundering (AML)/combating the financing of terrorism (CFT). It also observed that Cryptocurrencies are also prone to frauds and to extreme price volatility, given their highly speculative nature. It also noted that the proliferation of private cryptocurrencies across the globe has sensitised regulators and governments to the associated risks.
According to the report, longer-term concerns relate to capital flow management, financial and macro-economic stability, monetary policy transmission and currency substitution. New illicit financing typologies continue to emerge, including the increasing use of virtual-to-virtual layering schemes that attempt to further muddy transactions in a comparatively easy, cheap and anonymous manner.
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, was included in the Lok Sabha Bulletin-Part II for introduction in the Winter Session of Parliament that concluded on December 22. According to the bulletin, the bill, which could not be introduced, sought to create a facilitative framework for the creation of the official digital currency to be issued by the RBI.
