The Reserve Bank of India (RBI) once more reiterated its stance about imposing a ban on private cryptocurrencies, such as Bitcoin (BTC) and Ether (ETH).
The governor of the Indian central bank said that crypto trading was no different than gambling. He said that the authority of the RBI would be undermined by crypto and the country’s economy would see dollarization.
Crypto ban
Shaktinkanta Das, the governor of the central bank in India, spoke on Friday at the Business Today Banking and Economy Summit on the topic of cryptocurrencies.
He emphasized the stance of the RBI of imposing a complete ban on crypto like bitcoin and ether. He said that the RBI had made its position regarding these cryptocurrencies very clear.
The governor of the Indian central bank said that there is no underlying value in these cryptocurrencies due to which a ban makes sense.
He said that some people defined cryptocurrency as a financial product and some regard it as an asset, but they have to have an underlying value to fit this definition.
However, there was no underlying value of cryptocurrencies at all.
Speculation
Das also talked about the market prices of cryptocurrencies and said that it was nothing more than speculation that determined these prices.
The governor also said that trading cryptocurrencies were very similar to gambling. He stressed that the value of these cryptocurrencies depended on make-believe.
Therefore, this makes it speculation and it would be considered gambling in more blunt terms. He added that gambling was prohibited in India and crypto trading should also be treated in the same way.
He said that if gambling were to be allowed, then they needed to set down the rules. The central bank reiterated that crypto does not fit the definition of a financial product.
He stated that the argument about crypto being a financial asset, or a financial product was completely misplaced.
The risks
Apart from that, the RBI governor also shed light on the risks to the Indian economy due to cryptocurrencies.
He stated that the monetary authority of India was the RBI, but if cryptocurrencies were to be legalized, it would no longer have any control over the economy’s money supply.
If that were to happen, then the central bank’s authority would be undermined and dollarization would also happen in the economy.
Last year in May, RBI officials issued the same warning about dollarization in the Indian economy due to cryptocurrencies.
They had said that it would be against the sovereign interest of the country if that were to happen. There is currently no regulatory framework in place to oversee cryptocurrencies in India.
A crypto bill has been under development for a number of years now, but the government has not made a lot of progress in this regard.
In October, Nirmala Sitharaman, the Indian Finance Minister, said that the government wanted to coordinate with G20 countries for discussing and developing a framework for crypto regulation in the country.
