Indian Supreme Court raps Union government on crypto rules delay: Report

July 28, 2023 Coin Telegraph

The Supreme Court bench asked the union government to file a report on whether the latter is capable of setting up a federal agency to investigate crypto-related crimes.

The Indian Supreme Court on July 27 reprimanded the Union government for the lack of crypto regulations in the country, according to a report in a local media outlet.

The Supreme Court in its observation noted that it is “unfortunate” that the government has yet to release any clear guidelines around cryptocurrencies. The observation from the court came amid growing instances of criminal activities involving cryptocurrencies and directed the Union government to bring on record whether it plans to set up any dedicated federal agency to investigate such crypto criminal cases, the local daily reported.

According to the report, Justices Surya Kant and Dipankar Datta said:

“You still don’t have any law, unfortunately. Do you have an agency at the national level to understand these cases and investigate them properly? We want you to identify a national specialised agency, in the national interest.”

The court’s observation came during the hearing of petitions booked in connection with cryptocurrency fraud cases in different states of India. The court asked the government to file a response on whether they are capable of setting up a mechanism to investigate such cases.

The fight for clear government-issued crypto regulations in India has been a long-drawn one. The government started working on a crypto bill on the instructions of the Supreme Court as early as 2018. However, the government is yet to introduce the final draft of the crypto bill despite assuring it would be completed repeatedly over the past four years.

While the Indian government is yet to come up with crypto guidelines, it was very quick to impose crypto taxation laws, which came into effect in April 2022. The law was first introduced during the bull market when India became one of the leading crypto markets with a number of crypto unicorns and trading volumes soaring into billions of dollars. However, the tax laws had a drastic impact on the thriving crypto market as the majority of the established firms decided to move away from India due to a lack of regulatory clarity.

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.

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RBI lists risks of stablecoin for developing economies, calls for global regulation

June 28, 2023 Coin Telegraph

Central Bank

The Reserve Bank of India listed six specific ways stablecoin can undermine emerging markets, adding to its mounting case against crypto.

Stablecoin has a lot of potential to harm emerging markets and developing economies, the Reserve Bank of India (RBI) claimed in its latest Financial Stability Report, released June 28. The report listed six threats that stablecoin presents.

The RBI has been a steadfast critic of cryptocurrency, but it was particularly articulate about the problems it sees with stablecoin “from an EMDE [emerging markets and developing economies] perspective.” It listed six specific problems, even though:

“The lack of authenticated data and inherent data gaps in the crypto ecosystem impede a proper assessment of financial stability risks.”

A stablecoin could threaten an EMDE through currency substitution, as its underlying assets are generally denominated freely convertible foreign currency, the report claimed. The “cryptoisation” of the economy that could result from large-scale stablecoin adoption could lead to currency mismatches “on the balance sheets of banks, firms, and households.”

News Alert | RBI Financial Stability Report: Governor Shaktikanta Das on importance of tech, opportunities for growth and global cooperation among regulators #RBIFinancialStabilityReport #RBI @RBI @DasShaktikanta pic.twitter.com/D5dwkYcjwn
— ET NOW (@ETNOWlive) June 28, 2023

An EMDE central bank could face problems setting the domestic interest rate and liquidity condition due to the presence of stablecoin in the economy, the RBI continued. Furthermore, the “decentralised, borderless, and pseudonymous characteristics of crypto-assets […] make them potentially attractive instruments to circumvent capital flow management measures.”

By presenting an alternative to the domestic financial system, stablecoin could interfere with banks’ ability to mobilize money and create credit by undermining credit risk assessment. Finally, the report said, peer-to-peer transactions are hard to track, which could increase the potential for their use in wrongdoing.

The RBI took the opportunity to repeat its call for global coordination. It said:

“A globally coordinated approach is warranted to analyse risks posed to EMDEs vis- à-vis AEs [advanced economies]. […] In this context, under India’s G20 presidency, one of the priorities is to create a framework for global regulation of unbacked crypto- assets, stablecoins and DeFi.”

The RBI has been more bullish on central bank digital currency (CBDC). It launched a wholesale digital rupee pilot project in November and a retail digital rupee pilot project in February. It also signed an agreement with the Central Bank of the United Arab Emirates in March to study a CBDC bridge to facilitate trade and remittances.

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De-dollarization: Is it really happening?

June 9, 2023 Coin Telegraph

Central Bank

In our latest Cointelegraph Report, we analyze the causes leading to the decline of the U.S. dollar as the world reserve currency and its potential implications.

De-dollarization, the decline of the United States dollar as the world’s dominant reserved currency, is underway, and it’s gaining momentum.

For over 100 years, the U.S. dollar has been the world reserve currency, which means it has been the dominant foreign currency held by central banks to carry out international transactions and settle international debt.

However, in the last 20 years, the dollar’s dominance in countries’ reserves has decreased from 70% to under 60%, according to the International Monetary Fund.

This trend has been accelerating since last year, when the U.S. and its allies froze Russia’s dollar reserve as a response of the country’s invasion of Ukraine.

Since then, several countries have been looking for alternatives to the U.S. dollar. Some are discussing the creation of new currencies for international trade, while others are buying an increasing amount of gold to diversify their reserve.

Bitcoin (BTC), a nascent asset with many of the characteristics of gold, may also benefit from this trend in the long run.

To know more about the causes and implications of the U.S. dollar decline and the assets that will benefit from it, watch the latest Cointelegraph Report on our YouTube channel and don’t forget to subscribe!

Indian banks asked ‘to prepare for the future’ with AI and blockchain

May 31, 2023 Coin Telegraph

In an RBI-organized conference for the directors of Indian banks, deputy governor Mahesh Kumar Jain discussed risk strategies around sustainable growth and stability.

A top federal official representing India's central bank, the Reserve Bank of India (RBI), recommended all banks adopt artificial intelligence (AI) and blockchain technology to ensure sustainable growth and stability.

In an RBI-organized conference for the directors of Indian banks, deputy governor Mahesh Kumar Jain discussed risk strategies around sustainable growth and stability.

Governance in Banks: Driving Sustainable Growth and Stability - Speech delivered by Shri M K Jain, Deputy Governor, Reserve Bank of India at the Conference of Directors of Banks organised by the RBIhttps://t.co/Ft4Kv68X0T
— ReserveBankOfIndia (@RBI) May 31, 2023

Jain spoke about the importance of effective corporate governance and governance structure and processes when it comes to staying prepared for future risks. Technological disruptions, evolving customer expectations and cybersecurity threats among others have put forth new sets of risks for the banks across technology, business and operations. His recommendation for addressing the said set of challenges was to focus on tech adoption.

“To prepare for the future," Jain recommended Indian banks to "adopt innovative technologies such as AI and blockchain," along with focusing on digital transformation, enhancing customer experience, and investing in cybersecurity measures.

India’s central bank digital currency (CBDC), which was launched on Nov. 1, 2022, started being tested for offline functionality in March. At the time, RBI executive director Ajay Kumar Choudhary shared India’s intention to materialize its CBDC as a medium of exchange.

India’s neighbor, Pakistan, also recently announced an ambitious plan to train 1 million IT graduates on AI by 2027.

Draft National AI Policy (https://t.co/pZ516dmP8R)#MOITT believes in an inclusive approach for effective policy making. Please share your feedback through email (feedback.naip@moitt.gov.pk) so that the policy draft is updated in the best interests of citizens of Pakistan. pic.twitter.com/afbkyNuG11
— Ministry of IT & Telecom (@MoitOfficial) May 22, 2023

As previously Cointelegraph reported, Pakistan’s intended use cases for AI include predicting the weather, agriculture supply chain optimization and health services transformation, to name a few.

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Bangladesh and India to Trade in National Currencies Due to US Dollar Liquidity Issues

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India explores offline functionality of CBDCs — RBI executive director

March 4, 2023 Coin Telegraph

CBDC

In addition to offline functionality, RBI is gauging CBDC’s potential for cross-border transactions and linkage with legacy systems of other countries.

India’s recently launched in-house central bank digital currency (CBDC) — the digital rupee — is now being tested for offline functionality, revealed Ajay Kumar Choudhary, executive director of the Reserve Bank of India (RBI).

The RBI — India’s central bank and regulatory body — launched the wholesale segment pilot for the digital rupee on Nov. 1, 2022, onboarding 50,000 users and 5,000 merchants for real-world testing. As of Feb. 25, around $134 million and 800,000 transactions have been completed via wholesale CBDCs.

Building on this progress, Choudhary said the RBI is looking at the CBDC’s offline functionality. Speaking to CNBC TV18, he stated the RBI is gauging the CBDC’s potential for cross-border transactions and linkage with legacy systems in other countries. He added:

“We are eagerly looking forward to private sector and fintechs’ participation in CBDC. We will see their contribution, especially on offline and cross-border CBDC transactions.”

Moreover, speaking on behalf of the RBI, Choudhary said the CBDC would soon become the medium of exchange and needs all features of physical currency, including anonymity.

India’s motivation for launching the CBDC was to improve regional financial inclusion and spearhead the digital economy. Choudhary also told CNBC TV18 that CBDC would eventually act as a replacement for cryptocurrencies.

On Feb. 21, India’s national payment network, the unified payments interface (UPI), expanded its services to Singapore.

UPI goes Global!

Since UPI was introduced as a payment system in India, it has revolutionised the lives of Indians, but in fact, India’s digital payment system is steadily becoming globally attractive & is being adopted by other countries.#indiafirst #IndiaSingaporeRelations pic.twitter.com/55sGh5bzbZ
— MyGovIndia (@mygovindia) February 21, 2023

The UPI PayNow integration allows citizens from India and Singapore to send money across borders quickly.

Initially, four major Indian banks — the State Bank of India, Indian Overseas Bank, Indian Bank and ICICI Bank — will facilitate outgoing remittances. Axis Bank and DBS Bank India will facilitate incoming remittances. Singapore’s DBS Bank and Liquid Group will provide the service to users in the region.

India expands national payment network to Singapore: What’s in it for crypto?

February 21, 2023 Coin Telegraph

CBDC

One of the banking partners in the cross-border remittance service is also part of the government’s CBDC program.

India’s national payment network, the unified payments interface (UPI), is expanding its services beyond Indian borders, integrating with Singapore’s PayNow rapid payment system. Shaktikanta Das, governor of the Reserve Bank of India, and Ravi Menon, managing director of the Monetary Authority of Singapore, launched the facility through token transactions using the UPI-PayNow linkage.

The UPI-PayNow integration will allow users of the two nations to send money across borders quickly. It is possible to send or receive money from India using only a UPI-id, cellphone number or virtual payment address for money held in bank accounts or e-wallets. UPI’s instant real-time payment system helps to transfer cash immediately via a mobile interface between the two bank accounts.

UPI goes Global!

Since UPI was introduced as a payment system in India, it has revolutionised the lives of Indians, but in fact, India’s digital payment system is steadily becoming globally attractive & is being adopted by other countries.#indiafirst #IndiaSingaporeRelations pic.twitter.com/55sGh5bzbZ
— MyGovIndia (@mygovindia) February 21, 2023

Initially, the State Bank of India, Indian Overseas Bank, Indian Bank and ICICI Bank will facilitate outgoing remittances. Axis Bank and DBS Bank India will facilitate incoming remittances. DBS Bank and Liquid Group will provide the service to users in Singapore.

ICICI Bank, a private sector bank in India is also part of the country's central bank digital currency program. India launched its CBDC pilot in two phases, one in November for the wholesale market and another in December for retail users. Since the trial's beginning on December 1st, 2022, the digital rupee pilot project has logged 770,000 transactions involving eight banks. Five cities are already participating in the experiment, with nine more cities possibly joining the trial soon.

Sathvik Vishwanath, CEO of Indian crypto exchange Unocoin, told Cointelegraph:

"This is a great value addition for India’s payment rails given that there is close to 30% population in Singapore are ex-pats and they send money to India once a month or a quarter. This integration eliminates friction reducing the processing time and costs.”

India’s digital payment infrastructure has scaled dramatically over the past few years and was popularised with the advent of Covid-19. While the government is sceptical about the larger crypto market, imposing a 30% tax on crypto gains, which subsequently forced major players to move out of the country. However, the government is keen on using blockchain tech for its CBDC program and the existing infrastructure could help in scaling its digital CBDC pilot as well.

India in ‘no hurry’ for CBDC as digital rupee pilot onboards 50k users

February 8, 2023 Coin Telegraph

CBDC

The central bank of India wants to proceed with CBDC testing in the smoothest way possible, deputy governor Rabi Sankar said.

The Indian government doesn’t want to rush its central bank digital currency (CBDC) pilot despite joining the CBDC race just a few months ago.

India’s recently launched CBDC pilot has amassed 50,000 users, and 5,000 merchants since the Reserve Bank of India (RBI) launched the digital rupee pilot last year, local news agency The Economic Times reported on Feb. 8.

Announcing the first public milestones of India’s digital currency at a policy press conference, RBI deputy governor Rabi Sankar stressed that the government plans to proceed with CBDC testing in the smoothest way possible.

“We have our targets in terms of users, in terms of merchants. We will go slowly,” Sankar stated, noting that the RBI doesn’t want to push CBDC developments without having full awareness about its potential impact. He stated:

"We want the process to happen, but we want the process to happen gradually and slowly. We are in no hurry to make something happen so quickly.”

The latest announcement adds up to data from an official digital rupee application, which suggests that the pilot is taking no more users. According to data from the digital rupee app by the ICICI Bank, India’s CBDC program is full at the time of writing, suggesting that more users would be able to join the trial at a later date.

*India's e-RUPI app stopped registering new users. Source: Cointelegraph*

Sankar noted that the digital rupee pilot project has recorded 770,000 transactions across eight banks since the trial was launched on Dec. 1, 2022. The project is currently being carried out in five cities, with nine more cities potentially gradually joining the pilot soon. The official also said that five more banks are set to join the project in the near future.

As previously reported, RBI officially debuted a wholesale CBDC in November 2022, launching a retail CBDC a month later. The Indian government initially announced CBDC plans in early 2022, declaring that a digital rupee would be a “big boost” for India’s economy. The RBI then proposed a three-step graded approach for its rollout, aiming for little or no disruption to the traditional financial system.

India’s CBDC developments came years after countries like China started aggressive digital currency rollout in April 2020. Despite massive efforts to promote the use of CBDC, some former central bank officials claimed that the digital yuan’s usage has been low.

Crypto could spark the next financial crisis, says India’s RBI head

December 22, 2022 Coin Telegraph

CBDCs

Reserve Bank of India Governor Shaktikanta Das warned that if crypto becomes regulated and is allowed to grow, it could cause the next financial meltdown.

The governor of the Reserve Bank of India (RBI), Shaktikanta Das, did not mince his words when discussing the crypto sector at a recent conference, asserting that “private” crypto will be behind the next financial crisis.

Speaking at the Business Standard BFSI Insight Summit on Dec. 21, Das suggested that private crypto — those which are not issued by banks or governments — are backed by nothing and are purely tools for speculation.

"They have no underlying value. They have huge inherent risks for our macro economic and financial stability. I am yet to hear any credible argument about what public good or what public purpose it serves," he said.

*Shaktikanta Das Speaking at the Summit, Photo: Kamlesh Pednekar*

Adding to those sentiments, Das went on to suggest that a full scale crypto ban in India would be the best approach moving forward:

“It [private cryptocurrency trade] is a hundred percent speculative activity, and I would still hold the view that it should be prohibited … because, if it is allowed to grow, if you try to regulate it and allow it to grow, please mark my words, the next financial crisis will come from private cryptocurrencies.”

Highlighting examples of such risk, the RBI head pointed to the recent FTX implosion led by the freshly extradited Sam Bankman Fried.

"I don't think we need to say anything more about our stand after the developments over the last one year including the latest episode around FTX," he said.

Such comments mark another instance in which a key figure in politics or finance has blamed the crypto sector for FTX’s collapse, with many U.S. senators in particular taking the chance to slam digital assets over the past few weeks.

Das, of course, spoke in much more favorable terms of Central Bank Digital Currencies (CBDCs), as he emphasized that the RBI is actively pushing to get its digital rupee off the ground.

"You will see in days to come more and more central banks will embrace digital currencies and India has been in the forefront of the digital revolution in the current century,” he said.

The RBI has historically had a frosty view on crypto and questioned its value on several occasions. Das’ latest comments show that the sentiment is only getting worse, as the bank had previously ranked the sector at the bottom of its list of systemic risks as recently as June.

India’s Central Bank Digital Currency Should Be Able to Do Anything Cryptocurrency Can Do With No Risk, Official Claims

December 6, 2022 Bitcoin.com

Reserve Bank of India

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