RBI Governor has conveyed his opinion on negative aspects of cryptocurrencies and country's growing demand for them at Business Today Banking and Economy Summit.
Reetu | Jan 16, 2023 |
Budget 2023: RBI Governor urges for a Complete Ban on Cryptocurrency as Union Budget 2023 approaches
The RBI Governor, Shaktikanta Das conveyed his opinion on the negative aspects of cryptocurrencies and the country’s growing demand for them at the Business Today Banking and Economy Summit, on Thursday last week.
When discussing the role of cryptocurrencies in the Indian economy, Das said, “Cryptocurrency should be outlawed because it has no real market value. Every financial product, like every asset, has an underlying value, so the value of cryptocurrencies is entirely based on conjecture.”
Das also emphasised the volatility of cryptocurrency prices, which makes it untrustworthy. “Price volatility is based on the fictitious concept that the price of a particular cryptocurrency can rise or fall. So, anything without an underline whose valuations are entirely based on make-believe is purely speculative or, to put it bluntly, gambling.”
As he spoke at the event, Das continued, “Crypto is a form of gambling without any underlying value and is nothing more than a world of pure speculation.”
This is a concerning sign for India’s crypto industry, especially since the annual Union Budget is only a few days away.
According to recent reports, it’s been revealed that the RBI has an antagonistic sentiment to crypto and considers it an entity that can cause “financial instability”. Das emphasised the central bank’s stance on prohibiting Bitcoin and Ethereum in the face of rising demand.
The Governor stated at the event, “RBI may likely fail in monitoring the transactions if crypto is allowed in India.”
He continued, “Crypto posing as a financial asset is a completely misplaced argument. Das referred to cryptocurrency as a form of gambling while stating that “Our country does not promote gambling, and if people still want to continue investing in it, lay down appropriate rules for the same.”
On a larger scale, he asserted, “Cryptocurrencies have the potential to develop into a medium of exchange for carrying out a transaction. The majority of it is in dollars, and if one lets it develop, that means 20% of transactions are made using cryptocurrencies, which means they are not being issued by central banks but rather by private businesses around the world.”
The governor of the RBI expressed his worries about the future of this currency, which could be harmful to the economy, while pointing to the most recent FTX collapse. “Dollarization would increase due to rising crypto usage and may act against the country’s sovereign interest,” he said during his speech at the event.
Das concentrated on the topic of a cryptocurrency regulatory framework. As previously mentioned, the government has been working on a crypto bill continuously for many years. A technology-driven regulatory framework for crypto assets was to be introduced at the G20 Summit, according to Nirmala Sitharman, who voiced her opinion on the topic in October.
In case of any Doubt regarding Membership you can mail us at [email protected]
Join Studycafe's WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"
