RBI is concerned about the financial instability that can be caused by cryptos. Investments in cryptos could be made by over-leveraged individuals and firms. They can go broke.

Former RBI governor Raghuram Rajan observes that there is little danger of Indian currency becoming dollarised, as cryptos are highly volatile, and the rupee will be a preferred option. RBI will not find it difficult to ensure the local currency is not substituted by cryptos. Thus cryptos would not be risky to framing monetory policy.

It is true that regulators around the world are struggling to understand cryptos, and are not sure how these could be regulated. Even if there are few black sheep, it could cause considerable damage.

Despite the ban, it is unlikely that investments in cryptos will be discontinued. The government must ensure that investments must not be made from borrowings — banks, NBFCs and so on. Here vigilance is to be exercised.

There are more than 6000 private cryptos in the world. In India, a few are popular. On what basic, the government can allow certain cryptos?

It is not sufficient to regulate the exchanges, as they are mere intermediaries. The technology is based on distributed ledger. The mining is done by anonymous people, and the structure is opaque. This the USP of private cryptos. Is it possible to regulate such persons or system?