The Reserve Bank of India (RBI) Deputy Governor, T. Rabi Sankar called for an outright ban on crypto in the country.
In Brief:
- RBI Deputy Governor, T. Rabi Sankar says that banning crypto is the most advisable choice for India.
- Comparing it to Ponzi Schemes says can’t be defined as currency or asset.
- Also, they will wreck the currency system of the country and are meant to evade government control.
While speaking at the 17th Annual Banking Technology Conference and Awards of the Indian Banks Association, in the strongest attack against the blockchain system, he said:
“We have seen that crypto-technology is underpinned by a philosophy to evade Government controls. Cryptocurrencies have specifically been developed to bypass the regulated financial system. These should be reason enough to treat them with caution.”
He further said that the central bank has examined the arguments by the advocates of cryptocurrency and the lack of basic scrutiny poses a problem.
According to Sankar, cryptocurrency threatens a country’s financial sovereignty and makes it vulnerable to strategic manipulation by private corporations that create these currencies or governments that control them.
Stating also that, cryptocurrencies are not definable as a currency, asset, or commodity and they are similar to Ponzi schemes.
“They undermine financial integrity, especially the KYC regime and AML/CFT regulations, and at least potentially facilitate anti-social activities. More substantially, they can (and if allowed most likely will) wreck the currency system, the monetary authority, the banking system, and in general the Government’s ability to control the economy,” he said.
Comparing cryptocurrency to drug trafficking, the Deputy Governor said that cryptos are already being used illegally, and to argue against banning it is superficial.
Reiterating the fundamental risks of crypto, he also said that they are intended to be private currencies and to evade government control.
“All these factors lead to the conclusion that banning cryptocurrency is perhaps the most advisable choice open to India,” the RBI Deputy Governor added.
Last week, the RBI governor issued a strong warning against investing in cryptocurrencies, claiming that they lacked the underlying value of even a tulip.
