Shaktikanta Das, governor of the Reserve Bank of India (RBI), advocated for a ban on cryptocurrencies at a recent conference, according to a Jan. 13 story from India Today.
The central bank’s position on cryptocurrencies, according to Das, “is very clear—it should be banned.” He continued by claiming that cryptocurrencies “does not have any underlying value” and that their value is based on “make-believe”
“To put it bluntly, it is gambling,” said Das, noting that gambling is prohibited in India. His remarks reaffirm a comparable analogy made by politician Sushil Kumar Modi of Bihar in April. Even though some Indian states permit betting and lotteries, the activity is mostly outlawed and there is a large-scale problem with illegal gambling there.
The RBI, which serves as India’s central bank and monetary authority, was also concerned that allowing bitcoin may weaken its position. He cautioned that cryptocurrency could result in India losing control over the money supply.
He stated that the introduction of cryptocurrencies could result in dollarization, wherein foreign U.S. currency will replace the Indian rupee more and more.
Indirectly referring to the recent collapse of FTX and the ensuing slump in the cryptocurrency market, he said that the RBI has previously warned of a crypto collapse. He said, “If you see the developments, I think I don’t need to add anything more,”
Since at least late 2021, Das and the RBI have indeed issued comparable cautions. In December of last year, Das made a personal appeal for a crypto prohibition.
India has not yet expressly outlawed the usage of cryptocurrencies, despite numerous allegations to the contrary. Additionally, Das appears to be in favor of some blockchain applications, and India is working to regulate CBDCs.
However, the nation will begin taxing capital gains from cryptocurrency trading at a relatively high rate of 30% in 2022 (along with a 1% transaction tax).
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