After the RBI governorShaktikanta Das?delivered a stark warning for Indian crypto investors last week, its now the deputy governor who has dropped further bombshells on India¡¯s crypto investors.?
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At a keynote address on Monday, the deputy governor of RBI T. Rabi Sankar compared cryptocurrency to Ponzi schemes.
The deputy governor also said that banning and not regulating them would be the ¡°most advisable choice¡± for the Indian government.
He told the audience during the address, ¡°We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity. Cryptocurrencies are not currencies or financial assets or real assets or even digital assets. Therefore, it cannot be regulated by any financial sector regulator. It is not possible to regulate something that one cannot define."
The RBI deputy governor feels that regulating crypto would ultimately be condoning its use as a store of value and even a currency in some cases.?
Merely regulating it could be akin to encouraging its use within the framework laid out by the government. However, he acknowledges that some people will still use crypto if it is banned, just as ¡°drug trafficking is a rampant phenomenon despite a ban.¡±
Further, he also pointed out that permitting cryptocurrency to exist in a fiat-dominated ecosystem ¡°is bound to have a destabilizing effect on the monetary and fiscal stability of a country.¡± If crypto is regulated so that it can be used as an investment asset.?
The deputy governor also said that its utility will rise as a store of value, and could draw more users away from the Rupee.
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He attacked cryptocurrencies¡¯ true value by saying ¡°Also, unlike the value of Rupee, which is anchored by monetary policy and its status as legal tender, the value of crypto assets rests solely on the expectation that others will also value and use them.¡±
Also Read:?Countries Where Cryptocurrency Is Currently Banned
These statements by the RBI deputy governor again put a bigger question mark on the future of India¡¯s crypto industry.?
Although the Finance Minister had last week stated that she would not immediately decide whether to legalize or ban crypto,? the heavy tax on crypto and RBI governor and deputy governor¡¯s recent statements offer zero hints of hope for crypto investors in India. Moreover, the repeated delay in presenting the much-anticipated crypto bill is another reason why India¡¯s crypto industry¡¯s future remains cloudy.
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