India is reportedly considering a ban on Bitcoin and other crypto, which have sparked discussions in the broader digital assets space. Recent reports indicate that the nation seeks to promote its Central Bank Digital Currency (CBDC) while prohibiting use of the private cryptocurrencies. This development has caught the eyes of the investors, with CoinDCX CEO recently responding to the update.
India Considers Bitcoin & Crypto Ban Amid CBDC Focus
A recent Hindustan Times report indicates that India is leading toward a potential ban on private crypto. The regulators reportedly cited the risks associated with private crypto while noting the benefits of CBDC for this decision.
Notably, the country’s CBDC, known as the digital rupee, has been in pilot since November 2022, with growing adoption in retail and wholesale segments. The report cited an anonymous official, who argues that the CBDC could offer the same advantage as private crypto like Bitcoin. Besides, it could also provide better security, without the associated risks.
Meanwhile, the report also said that the government has consulted with market experts regarding this. The experts said that CBDCs offer financial inclusion, making it easier to deliver targeted funds to vulnerable populations.
RBI Governor Shaktikanta Das stated that the programmability of CBDCs could be a game-changer in ensuring targeted subsidies reach those who need them most. Besides, the use of blockchain technology in CBDC could aid in several aspects like government securities, targeted lending, and others. It’s worth noting that the RBI Governor is an active supporter of CBDCs, who has also previously highlighted risks associated with crypto.
However, the final decision regarding the crypto ban is yet to be made. The government is currently consulting experts and considering data from the ongoing CBDC pilots. In addition, it is influenced by the G20’s adoption of the IMF-FSB synthesis paper, which suggests that countries can adopt stricter regulations on cryptocurrencies, even implementing an outright ban if deemed necessary.
CoinDCX CEO Responds On CBDC Vs Crypto Debate
Sumit Gupta, CEO of one of the top Indian crypto exchanges CoinDCX, recently commented on the comparisons being made between CBDCs and private cryptocurrencies. In response to the report from the Hindustan Times, he challenged the statement that CBDCs could fully replace or outperform cryptocurrencies like Bitcoin.
He emphasized that the two digital assets serve different purposes and can complement each other. According to Gupta, CBDCs focus on specific government-driven functions like financial inclusion, whereas cryptocurrencies offer other benefits such as decentralization, broader market access, and innovation.
Source: Sumit Gupta, X
Meanwhile, he urged India regulators to look beyond competition and see how both technologies can coexist to strengthen the financial system. Besides, the CoinDCX CEO also stressed the importance of ongoing discussions to create a balanced and robust financial ecosystem, leveraging both CBDCs and cryptocurrencies.
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