On September 13, 2017, Executive Director Sudarshan Sen of the Reserve Bank of India (RBI) discussed the possibility of a government-backed cryptocurrency at the India FinTech Day conference in Mumbai. Sen announced, “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.”
Although Sen hinted at the possible blockchainization of the rupee, there have been no official statements from the RBI to confirm this as a long-term strategy. Sen also stated that officials at the RBI are not comfortable with private (non-fiat) cryptocurrencies, such as bitcoin. In December 2013, the RBI cautioned the public about the risks of virtual currency investment and trading. Last month, Indian government officials submitted a report on cryptocurrency to Finance Minister Arun Jaitley. Although the details of this report have not yet been made public, the drafters of the report were tasked with examining frameworks for cryptocurrencies and proposing measures for dealing with various issues related to cryptocurrencies, such as consumer protection and money laundering.
Over the last few weeks, bitcoin has faced increased scrutiny as governments across the world cautioned investors about the risks associated with token offerings (ICOs). Yesterday, the United Kingdom’s Financial Conduct Authority published a warning to cryptocurrency consumers. And, earlier this month, the People’s Bank of China issued an outright ban on initial coin offerings.