Ban cryptocurrency, BJP MP Shivkumar C Udasi urges government

New Delhi: A BJP MP appealed to the government on Monday to ban cryptocurrency but favoured the use of blockchain technology to improve ease of living and growth.

Participating in the debate on the first batch of Supplementary Demands for Grants 2022-23 in Lok Sabha, Shivkumar C Udasi said a lot of people, especially young investors, have booked loss for their investment in crypto following the recent meltdown.

"I hope cryptocurrency will be banned in the country...already RBI has launched e-rupee," he said, adding that even the Parliamentary Standing Committee on Finance raised various issues against such kind of virtual currencies.

He expressed hope that blockchain technology or digital ledger will be used for future development of the country.

Giving an example, he said, blockchain technology can be used to check duplicity in land records.

It is to be noted that the central bank digital currency (CBDC) pilot launched by the RBI in retail segment has components based on blockchain technology.

The Reserve Bank of India (RBI) has launched pilots of CBDC in both wholesale and retail segments.

The pilot in wholesale segment, known as the Digital Rupee -Wholesale, was launched on November 1, 2022, with use case being limited to the settlement of secondary market transactions in government securities.

The use of Digital Rupee -Wholesale is expected to make the inter-bank market more efficient.

Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk. The pilot in retail segment, known as Digital Rupee-Retail, was launched on December 1, 2022, within a closed user group comprising participating customers and merchants.

The RBI has identified eight banks for phase-wise participation in the retail pilot project. The first phase includes four banks -- State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank.

Subsequently, four more banks -- Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank -- will participate in the retail pilot.