Banning cryptocurrencies the most advisable solution, says RBI deputy governor

The Reserve Bank of India’s deputy governor T Rabi Sankar on Monday said that banning crypto currency is perhaps the most advisable choice open to India, news agency ANI quoted him as saying. 

“We have examined the arguments proffered by those advocating that cryptocurrencies should be regulated & found that none of them stands up to basic scrutiny,” ANI quoted Sankar as saying. 

The RBI deputy governor even equated cryptocurrencies with ponzi schemes.

“We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to ponzi schemes, and may even be worse,” he added. 

This comes days after RBI governor Shaktikanta Das had said that cryptocurrencies were a threat to macroeconomy and financial stability, thereby undermining the central bank’s ability to deal with challenges on two fronts. 

“Private cryptocurrencies or whatever name you call it are a threat to our macroeconomic stability and financial stability. They will undermine the RBI’s ability to deal with issues of financial stability and macroeconomic stability,” Das had said. Watch video


Meanwhile, finance minister Nirmala Sitharaman on Monday said discussions with regard to private cryptocurrencies and central bank-backed digital currency with the RBI were underway and any decision would be taken after due deliberations, news agency PTI reported. 

“On crypto, I have said that we are in the process of consultation. Whatever decision the government is going to take, will be after the consultation,” she said as per PTI.

The finance minister in her budget speech on February 1 had announced a 30 per cent tax on gains based on such assets, thereby stating that the RBI will issue its own digital currency next year. 

(With agency inputs)




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