The Reserve Bank of India (RBI) has once again voiced their disapproval of cryptocurrencies such as bitcoin and ether. The Governor of the central bank has likened cryptocurrency trading to gambling and warned that it could “undermine the authority of the RBI and lead to the dollarization of the economy.”
RBI Governor Advocating Cryptocurrency Ban
The Governor of the Reserve Bank of India (RBI), Shaktikanta Das, spoke of the central bank’s stance towards cryptocurrencies during The Business Today Banking And Economics Summit on Friday.
Das made it clear that the RBI views cryptocurrencies as illegal and should be completely banned. According to India Today’s report, he said, “RBI’s position on cryptocurrencies is very clear: it should be banned.”
Emphasizing that cryptocurrencies do not have any underlying value, the Indian central bank governor explained:
Some refer to crypto as an asset while others call it a financial product. But every financial product and asset must have an underlying value. Cryptocurrency, however, does not have an underlying value.
Das then commented on market prices for cryptocurrencies, declaring that they were purely speculation. He commented, “Anything whose valuation depends entirely on fantasy is nothing more than 100% speculation, or to put it bluntly, it is a gamble.”
“In our country, we do not allow gambling. If you want to let the game go, treat it as a game and establish the rules,” the RBI chief stressed. He went on to state that he does not consider crypto a financial product.
It is completely wrong to pretend that cryptocurrency is a financial asset or product.
Das also warned of the dangers that cryptocurrencies present to the Indian economy. He warned, “The central bank will no longer be the country’s monetary authority and will lose control of the money supply. This will reduce the authority and dollarization of the RBI.”
Officials from the RBI also warned in May last year that cryptocurrency was a potential cause of the dollarization of part of the budget. This, they said, would “go against the country’s sovereign interests.”
At the moment, there is no regulatory framework for cryptocurrency in India. The government has been working on a cryptocurrency bill for several years and the Finance Minister, Nirmala Sitharaman, said in October last year that the government would be discussing cryptocurrency regulation with G20 countries to establish a technology-driven regulatory framework for crypto assets.
What do you think of RBI Governor Shaktikanta Das’ statements? Let us know in the comments section below.
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