January 19, 2023
By Tsering Namgyal
India’s central bank the Reserve Bank of India has once again called for an outright ban on cryptocurrencies.
The RBI governor Shaktikanta Das specifically mentioned cryptocurrencies such as Bitcoin and Ether as he bemoans them interfering with the bank’s monetary policy and even potentially lead to the dollarization of the economy.
Here is what we know so far:
On Friday, the Governor of the Reserve Bank of India, Shaktikanta Das, expressed his opinion on the increasing demand for cryptocurrencies in the country and its pitfalls, at the Business Today Banking and Economy Summit, according to local media reports.
Das said, “crypto should be banned, given its no underlying value in the market. Just like every asset, every financial product comes with some underlying value, hence the value of crypto is totally based on the make-believe factor.”
He also said that “Crypto is a form of gambling without any underlying value and is nothing but a 100 percent speculation world.”
Since the annual Union Budget is just a few days away, it is bad news for the crypto industry in India.
RBI has never been a fan of cryptocurrencies and considers and worries they may cause financial instability. Das stressed the central bank’s view of banning Bitcoin and Ethereum in the wake of its growing demand.
“If crypto is allowed in India, the RBI may likely fail in monitoring the transactions,” he said.
“Crypto masquerading as a financial asset is a completely misplaced argument,” he added. While counting crypto as a form of gambling, Das described, “Our country does not promote gambling, and if people still want to continue investing in it, lay down proper rules for the same.
He further claimed, “Crypto is not a financial product but pure gambling, and called for an outright ban on it.”
To say that the cryptocurrencies do not generate revenues is not fully accurate, crypto experts said.
“Some protocols are indeed generating revenues and this allows us to value them based on a cash flow analysis like traditional assets,” Markus Thielen, head of research at Singapore-based crypto service provider Matrixport told NFTmetta.com.
“So (to say) that crypto doesn’t have value is not correct,” he said. “There is a reason why many institutions are continuing to build their digital asset management capabilities. End clients are also requesting access.”
About the author
Tsering Namgyal is the chief content officer of NFTmetta.com.