India: Central Bank Report States Crypto Does Not Threaten Financial Stability

"[C]rypto-assets do not pose risks to global financial stability currently.

The market continues to evolve rapidly and this initial assessment could change if crypto-assets were to become more widely used or interconnected with the core of the regulated financial system.

RBI quoted a conclusion drawn from a recent report by the Financial Stability Board - an international agency consisting of banking and financial institutions from different countries, including India.

RBI itself is a member of the FSB, along with country's Securities and Exchange Board and Ministry of Finance.

In its study "Crypto-asset markets: Potential channels for future financial stability implications," published October, the FSB claimed that bankers see no significant danger in the existence of cryptocurrencies, as their total market cap by that time had barely reached 2 percent of the global value of gold.

The board urged watchdogs to keep an eye on the digital coin markets, given their quick growth.

The legal framework for cryptocurrencies in India remains unclear, as RBI formally stopped all banks from dealing with cryptocurrencies in April.

At the same time, an Indian government panel is reportedly considering a complete ban on crypto.

Initially, RBI had considered launching its own central bank digital currency, dubbed "Laxmi.

In January, the bank gave up the idea of making a stablecoin tied to the rupee, stating that it's too early to even think about it.