Cryptocurrency has some financial stability issues: Principal Economic Advisor
El Salvador has embraced bitcoin but there are still financial stability issues related to the cryptocurrency highlighted by the Reserve Bank of India, Principal Economic Adviser Sanjeev Sanyal said on Monday and added that the government would take a “balanced approach”.
“It is a matter of some debate within the government and also in Parliament. This is something that is currently under discussion. We understand the various issues surrounding it. RBI has highlighted its financial stability implications. We will discuss it with others. We can also see countries, for example, El Salvador adopting bitcoin,” Sanyal said while answering a question on cryptocurrencies at a press conference here.
“There are some financial stability issues. But there are other arguments that have been given in terms of innovation etc. A balanced approach will be taken on this. This is not something that we have covered in the Economic Survey, and I am presently thinking. Not in a position to comment on what it is, as it is still developing.”
In November last year, Prime Minister Narendra Modi chaired a meeting on the management of the cryptocurrency sector.
A consensus was reached at the meeting for “progressive and forward-looking” steps, while ensuring that an unregulated crypto market does not become a source of “money laundering and terror financing”. The meeting was the result of a consultation process involving the Reserve Bank of India, the Ministry of Finance and the Ministry of Home Affairs as well as experts.
The government intended to introduce a bill related to cryptocurrency in the winter session of Parliament, but decided to do more deliberations before coming up with a law.
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