Trust In Cryptocurrency Is An Ongoing Issue For India’s Central Bank

While it is true that many firms and organisations alike are competing to gain the most benefits from cryptocurrency, most notably Bitcoin, this does not seem to be the case for India and their central bank. This is surprising, though, as even billionaire tech giants such as Elon Musk have expressed their continued support for Bitcoin, so it makes us wonder as to why India is opposed to the idea of digital trading when so many are simultaneously supporting it.
India concerned with cryptocurrency’s lack of financial stability
One of the biggest reasons why India is hesitant to adopt cryptocurrency into its economy is due to the lack of financial stability, which itself is largely due to the platform’s volatile nature. CNBC TV-18, an Indian news channel reporting about financial and business news, reported that the Indian central bank has some serious concerns regarding cryptocurrency, and as such are hesitant to adopt the trend into their own nation.
This decision to not adopt cryptocurrency by the Indian central bank will have some serious, long-lasting ramifications for the country. Furthermore, many cryptocurrency exchanges based in India are still suffering the results of an RBI circular that had requested many financial institutions to no longer provide support for digital currencies. This is troublesome as many of these aforementioned exchanges can go out of business, and their employees can lose their jobs as the threat of a ban on cryptocurrency and digital trading still looms large in the country.
Bitcoin is considered to be too volatile
While it is certainly true that Bitcoin (and cryptocurrency in general) seems to be too volatile to be relied upon for a long-term basis, another major reason as to why India may be hesitant to adopt cryptocurrency is that of money laundering. Simply put, the country’s central bank is hesitant to rely upon anything that offers anonymity to its investors.
Although Bitcoin itself is classified as an open ledger of sorts, the investor’s identity can be hidden. This is problematic as India has had plenty of financial security concerns in the past, and they believe that cryptocurrencies may be utilized to evade paying taxes or even assist in the transfer of illegal money.
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