India's central bank still has 'major concerns' on crypto, says the governor

The Reserve Bank of India (RBI), the country's central bank, continues to have "major concerns" around cryptocurrencies, after giving clarity to banks last week to set aside a 2018 ban on crypto trading.

“There is no change in RBI’s position,” RBI Governor Shaktikanta Das said in an online press conference on Friday. “We have major concerns around cryptocurrency, which we have conveyed to the government.”

Das made similar comments in February, saying that the RBI has "major concerns" on crypto from the financial stability angle. The new comments come just three days after the RBI issued a circular asking banks not to refer to its old 2018 ban circular when dealing with crypto clients.

"It came to our surprise that some banks were still referring to and citing that old circular in their correspondence with their customers,” said Das. "We had to set the record straight that that particular circular of RBI has been set aside. So, therefore, it is not at all correct to refer to that circular."

In April 2018, the RBI had passed a rule that restricted banks and other financial institutions from dealing with crypto clients, but the Supreme Court overturned that rule last year. Still, some major banks, including HDFC Bank, were citing the old circular, warning customers of restrictions. Earlier this week, HDFC Bank reportedly redacted its warning.

As for whether Indians should invest in crypto, Das today said the RBI doesn’t give any investment advice. "It is for each investor to make his own appraisal, to do his own due diligence, and take a very careful call with regard to his own investments," said Das.

As The Block has reported previously, India's crypto fate depends on the country's central government. The government is likely to discuss a bill in the upcoming session of parliament, which seeks to "prohibit all private cryptocurrencies in India." The definition of private cryptocurrencies and the bill's other contents, however, are not yet public. 

Meanwhile, Indian crypto exchange operators remain optimistic that the government will not ban crypto and rather regulate it as an asset class.