Cryptocurrency ban can be the most advisable option for India, says RBI Deputy Governor
New Delhi: On February 14, Reserve Bank of India (RBI) Deputy Governor T Rabi Sankar launched a scathing attack on bitcoin, saying that banning cryptocurrency is “probably the most sensible decision available in India.”
Sankar mentioned this at the 17th Annual Banking Technology Conference and Awards hosted by the Indian Banks Association.
“We looked at the reasons put out by individuals who believe cryptocurrencies should be regulated and found that none of them stand up to scrutiny,” Sankar added.
The remarks are significant in response to the ongoing discussion over whether or not to prohibit digital currency. The deputy governor outlined a number of reasons that he believes contribute to the banking system’s concerns about private cryptocurrencies. This is probably the first time an RBI high official has publicly advocated for the prohibition of cryptocurrency.
The RBI governor, Shaktikanta Das, had previously raised worries about Cryptocurrencies, claiming that these tools are destructive to macroeconomic stability.
During the post-monetary policy press conference, Das again cautioned investors about investing in cryptocurrencies. “I believe it is my responsibility to inform investors that when they invest in cryptocurrencies, they should remember that they are doing it at their own risk.” They must remember that these cryptocurrencies have no underlying assets (asset). “Not even a tulip,” Das stated during the MPC press conference.
The Union government has announced a 30% tax on private digital assets beginning in the next fiscal year, but has yet to declare cryptocurrencies lawful or illegal.
Cryptocurrencies, according to Sankar, jeopardise a country’s financial sovereignty and leave it vulnerable to strategic manipulation by private corporations that create them or governments that control them.
“More importantly, they can (and will) damage the currency system, the monetary authority, the banking system, and the government’s ability to oversee the economy in general,” the deputy governor added.
Finance Minister Nirmala Sitharaman said on February 14 that the Union government and the Reserve Bank of India are in “total harmony” on cryptocurrencies and other matters.
The finance minister told reporters after the RBI’s board meeting that conversations with the central bank on the problem began prior to the budget and are still ongoing.
“We consult and debate whatever the government does with the RBI. So, if I charge 30% and then talk about the Goods and Services Tax (GST) and everything else, I’d be tying RBI’s hands if I hadn’t even spoken to them!” According to Sitharaman.
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