S. Ganesh Kumar, a director of the Reserve Bank of India, seems to have put an end to debate over cryptocurrency’s future in the country. Speaking on Monday, he said that virtual currencies would not be allowed for use as a means of payment or settlement in India. Although this is not an immediate ban, the outlook certainly does not look good for Bitcoin in the planet’s second most populated country. Ironically-titled, local financial paper Money Control reported Kumar as saying:
Our current position on bitcoins is that we will not be using it for any payments and settlements…though the technology underlying crypto-currencies will not end.
The RBI director’s words at the at the FIBAC banking conference in Mumbai on Monday seem to have dashed any hope within the relatively few participants of India’s small but growing cryptocurrency community. There are only currently a small handful of companies who accept digital currencies like Bitcoin for goods and services. These are predominantly niche restaurants and sellers of various inconsequential items. The main use case is, as it is elsewhere, as a store of value or investment opportunity. However, there are those who want to see greater adoption and are seeking to make that as easy as possible. Sandeep Goenka of Zebpay, one of India’s largest Bitcoin-related companies, said the following of Monday’s announcement:
We will do our best to continue with our efforts to educate the government about crypto-currencies… It can be useful for India by turning the country into a fintech hub, to increase financial inclusion, and there are several other benefits of it.
This isn’t the first sign of the lawmakers of India’s scepticism towards crypto. Earlier this year, a finance ministry panel recommended that Bitcoin and other digital currencies should be illegalised owing to the ease with which various nefarious acts can be committed using cryptos. Chief amongst these was money laundering.
Right now, we have a group of people who are looking at fiat cryptocurrencies. Something that is an alternative to the Indian rupee, so to speak. We are looking at that closely.