On January 13, the Governor of the Reserve Bank of India (RBI), Shaktikanta Das, reaffirmed his support for an absolute ban on cryptocurrencies. He said that cryptocurrencies are nothing more than a kind of gambling, and their apparent worth is nothing more than speculation.
RBI wants crypto banned
Das, while participating in a panel discussion at the Business Today Banking and Economy Summit, reaffirmed the position of the central bank about cryptocurrencies and said that they need to be outlawed. He said the RBI’s opinion on cryptocurrency is very clear, and that it is that it should be prohibited.
The RBI governor has said that blockchain technology must be promoted due to the many uses it has; yet, he is of the opinion that cryptocurrencies do not have any underlying value.
However, in order for anything to be considered an asset or a financial product, it must first have an underlying value. Some people refer to cryptocurrencies as an asset, while others term them a financial product. But again the governor of the RBI has warned that cryptocurrencies have no real value.
Anything without any underlying, whose value is dependent entirely on make-believe, is nothing but 100 per cent speculation or to put it very bluntly, it is gambling.Shaktikanta Das
Das said that considering something to be a kind of gambling and establishing regulations for it would be necessary if it were to be legalized in a jurisdiction that now prohibits such activities.
He went on to say that the allegation that cryptocurrencies are trying to pass themselves off as a financial product or an asset in the financial market is absolutely off base.
Furthermore, according to Shaktikanta Das, enabling the trading of cryptocurrencies inside the borders of the nation would be detrimental to the authority of the country’s central bank.
He elaborated, saying that the main macro rationale for prohibiting cryptocurrencies is that they exhibit the necessary features to function as a medium of exchange and are hence subject to prohibition.
Since most cryptocurrencies are priced in dollars, it is reasonable to imagine that 20% of all transactions in a given economy are conducted using cryptocurrencies produced by private entities if this trend is allowed to continue growing unchecked, said Das.
According to the central bank governor, the RBI, which serves as the country’s monetary authority in its capacity as the central bank, would lose control over the amount of money that is circulating in the economy if they were to allow the use of cryptocurrencies.
Please believe me, these are not empty alarm signals. One year ago in the Reserve Bank, we had said this whole thing is likely to collapse sooner than later. And if you see the developments over the last year, climaxing in the FTX episode, I think I don’t need to add anything more.Das