India ought to ban cryptocurrencies as they’re associated to Ponzi schemes or worse they usually pose a risk to monetary and macroeconomic stability, a deputy governor on the Reserve Bank of India (RBI) mentioned.
“We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi schemes, and maybe even be worse,” T. Rabi Sankar mentioned in a speech.
Sankar’s feedback have come after the Indian authorities established a taxation framework for cryptocurrencies.
On February 1, 2022, India determined to control cryptocurrencies by introducing a tax of 30% on revenue from transactions involving digital property, Blockchain.News reported.
Blockchain.News additionally reported that India’s Finance Minister Nirmala Sitharaman got here out weapons blazing to make clear that cryptocurrency taxation is a “sovereign right” and “corrective action”.
Sitharaman clearly famous that whereas the “profit emanating from transactions associated to cryptocurrency has been taxed, nothing has been done, at the moment, to legalise, ban or de-legalise it”.
Sitharaman additionally clarified doubts about the way forward for cryptocurrency within the nation, stating that if there have been any ultimate choices on prohibiting digital currencies, it might solely come after due session from all stakeholders.
It gave hope to crypto exchanges and buyers who’ve been arguing for the regulation of cryptocurrencies as an asset.
However, Sankar has been a agency supporter of an outright as a substitute of regulation.
“Cryptocurrencies are not currencies, financial assets, 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,” he mentioned.
“All these factors lead to the conclusion that banning cryptocurrency is perhaps the most advisable choice open to India.”
Sankar mentioned that cryptocurrencies have been developed to bypass the regulated monetary system and that he doesn’t settle for the argument that cryptocurrencies should be permitted for blockchain expertise to thrive.
Sankar additionally pointed to a Wall Street Journal report that acknowledged that there had been $14 billion value of illicit transactions, involving cryptocurrencies final 12 months.
According to trade estimates, there are about 15 million to twenty million cryptocurrency buyers in India, with complete holdings of about 400 billion Indian rupees ($5.3 billion).
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