At the Indian Banks’ Association 17th Annual Banking Technology Conference, T Rabi Sankar, the deputy governor of the Reserve Bank of India, dismissed cryptocurrencies as a financial asset calling out for an all-out ban.
According to Sankar, cryptos are much like “a speculative or gambling contract working as a Ponzi scheme”, going on to add that he’d prefer a Ponzi scheme to crypto, as the former invests in income-earning assets. Sankar thinks that cryptos threaten the nation’s financial sovereignty and make it susceptible to strategic manipulation by private entities.
Sankar’s views, however, seem contrary to the current policy against crypto in India at the moment. Announced earlier this month, the latest policy calls for a 30% tax on income emerging from crypto and NFT transactions, with such gifts being taxed to the recipient.
So an all out ban then?
While the RBI has considered imposing regulations on crypto, Sankar thinks they don’t stand up to basic scrutiny, stating that banning cryptos is perhaps the most advisable choice open to the country.
Taking up the argument that a crypto ban will be ineffective, Sankar compared it to human trafficking, stating that while being banned, it’s still a reoccurring phenomenon, but that wouldn’t be grounds for the activity to be legalised and regulated.
He also suggested that current crypto investors be given a “reasonable exit” to cushion any losses from a sudden ban. India did come close to a ban in November 2021 when The Cryptocurrency and Regulation of Official Digital Currency Bill was announced in a Lok Sabha bulletin aiming to create a framework for an official digital currency launched by the RBI as well as prohibiting all private cryptocurrencies in the country, making a few exceptions to “promote the underlying technology of cryptocurrency and its uses”.
With India set to launch its digital Rupee powered by the blockchain, a ban on cryptos will put the newly launched state crypto in an interesting spot.
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