Reserve Bank of India Governor Shaktikanta Das doesn’t like crypto. In fact, he wants to get rid of it through an outright ban, saying it’s “nothing but gambling.”
Das said in a speech at the conference that RBI’s stance on cryptocurrency remains unchanged.
The bank official stated that the digital currency cannot be considered a financial product and should be treated like a “gambling activity.”
The RBI has been vocal about its opposition to the currency and also led other central banks by issuing its own central bank digital currency (CBDC) late last October.
RBI Governor Shaktikanta Das. Image: NDTV
Why RBI Governor Wants To Get Rid Of Crypto
Das explained why he wants an outright ban on cryptocurrencies. He said that in addition to the dangers of terror financing commonly associated with these types of assets, the definition was unclear.
“Some people call it an asset, while others call it a financial product and when that happens, there has to be a bottom line,” he said. “In the case of crypto, there is no bottom line.”
Bitcoin is a hot topic in India, but the government is not taking it lightly. In a recent statement, the RBI said:
“Crypto is not a financial product, so pretending it is a financial product or an asset is a false argument.”
RBI’s official stance on bitcoin comes after reports that the system implemented by the now-defunct FTX exchange has failed. The report also mentions that there are rumors about the RBI’s plans to ban digital currencies in India.
However, at the macro level, the RBI governor said:
“Cryptocurrencies have the potential to be a tool of exchange to carry out transactions. Most of them are denominated in dollars and if one allows it to grow, it means that 20 percent of transactions are carried out through crypto, which means that it does not happen by central banks and is issued by private companies around the world.
If that happens and people start using crypto instead of dollars – and they do – then the RBI will lose control over the money supply in the economy.
On The Influence Of Bitcoin & The US Dollar
Some analysts say that since bitcoin is really a financial product, there will be special rules. And that’s just not small.
Crypto total market cap at $922 billion on the weekend chart | Chart: TradingView.com
In fact, most digital currencies are dollar-denominated. That means they are used to make transactions with fiat currency, which means they are not issued by central banks and they are not used to control the source of money in the economy. And that means the RBI has lost control.
Meanwhile, warning that the legalization of bitcoin will increase the dollarization of the economy, Das stated that the claim that digital assets are disguised as financial products or financial assets is completely wrong.
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