Cryptocurrency has some financial stability issues: Principal Economic Advisor

Al Salvador has adopted Bitcoin but there are still financial stability issues relating to cryptocurrency highlighted by the Reserve Bank of India, Principal Economic Advisor Sanjeev Sanyal said on Monday and noted that the government will take a “balanced view”.

“This a matter of some debate both inside the government and even in Parliament. This is something that is currently in discussion. We understand the various issues around that. RBI has highlighted the financial stability impacts of this. We can also see it in other countries, for example, El Salvador has adopted Bitcoin,” Sanyal said answering a query on cryptocurrencies at a press conference here.

“There are some financial stability issues. But there are also other arguments that are made in terms of innovation and so on. A balanced view on this will be taken. This is not something we have covered in the economic survey, and I’m not quite in a position to comment on what the current thinking is, because that’s still evolving,” he added.

Prime Minister Narendra Modi had chaired a meeting on the way forward for managing the cryptocurrency sector in November last year.

A consensus had emerged at the meeting for “progressive and forward-looking” steps while ensuring that an unregulated crypto market does not become an avenue of “money laundering and terror financing”. The meeting was an outcome of a consultative process involving the Reserve Bank of India, Finance Ministry and Home Ministry as also experts.

The government had intended to bring a bill relating to cryptocurrency in the winter session of parliament but decided to hold more deliberations before coming up with legislation.

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