India’s finance ministry panel tasked with solving the cryptocurrency legislation debate is reportedly worried about the impact crypto assets could have on the Indian rupee, Quartz India writes. The committee, which is in the midst of drafting India’s cryptocurrency regulation, has supposedly expressed concern over possible destabilisation of traditional banks once digital coins become widely available.
“The overall impact on the financial ecosystem that it is likely to have is still unclear,” said an anonymous source who met recently with the panel. “It has been a challenge to convince them on this particular point.”
The status of the drafted regulation is currently unclear. However, past statements made by government officials did not predict a bright future for digital currency in India. Back in 2018, India’s finance minister Arun Jaitley stated that the government would not “recognise cryptocurrency as legal tender or coin.” Jaitley warned that legislative measures would be taken for any attempts to utilise cryptocurrency for “financing illegitimate activities or as part of the payments system.”
Earlier this year, Reserve Bank of India announced indefinite postponing of the launch of the crypto-rupee, despite its earlier plans for launching India's own Central Bank Digital Currency.