RBI Stands Firm Against Cryptocurrency Legalization Amid Regulatory Concerns

The Reserve Bank of India (RBI) has reiterated its opposition to the legalization of virtual digital assets (VDAs), including cryptocurrencies. The RBI presented its views to a Parliamentary panel examining the use and regulation of VDAs.

In a meeting with the Parliamentary Standing Committee on Finance, the RBI highlighted the risks associated with privately issued cryptocurrencies, citing complex regulatory challenges, taxation issues, and enforcement difficulties.

The central bank pointed out that countries like China and Qatar have banned digital assets, while regions like Europe allow them under strict regulatory frameworks. The RBI also expressed concerns about potential misuse for illegal activities such as terror financing and narcotics trafficking.

The Institute of Chartered Accountants of India (ICAI) advocated for a comprehensive legal framework for VDAs during the session. ICAI recommended a principle-based regulatory approach and suggested developing detailed guidance on recognition, measurement, presentation, and disclosure of digital assets in financial statements.