While there are many different countries that have been showing support to the community of cryptocurrency, there are some others who aren’t really that supportive in the first place.
Countries such as China and Russia have shown that crypto mining and trading activities will not be entertained in the nations by imposing different bans. However, India is still speculating whether having crypto mining and trading options is a wise choice or not. Well, the Deputy Governor of the Reserve Bank of India seems to have made up his mind about the banning of crypto in india.
According to Deputy Governor, T. Rabi Sankar, cryptocurrency has been having a destabilizing effect on the people of the country and has become probably the fiat currency of the country.
The Deputy Governor of the Reserve Bank of India has also compared crypto to the different Ponzi schemes after also mentioning that imposing a ban on crypto mining and trading-related activities would actually be a very advisable choice at this point.
This goes to show that the Deputy Governor has definitely taken a very strong stance against the mining and trading of crypto, according to current news of cryptocurrency.
In a keynote speech that Sankar gave as the Deputy Governor of RBI on the 14th of February, he mentioned that cryptocurrencies aren’t really an amenable definition of the currency that is going in the country. These currencies don’t fit the definition of commodity and asset as well. Hence, according to the Deputy Governor, banning crypto is the best solution during these times for sure.
“Cryptocurrencies are not currencies, 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.”, he said.
Sankar also has a pretty strong feeling that by having some regulations on the crypto trading front there will be much more benefits since it can be seen as properly 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.”
He also mentioned in his speech that allowing cryptocurrency to take place in a fiat-dominated ecosystem “is bound to have a destabilizing effect on the monetary and fiscal stability of a country.” If crypto is controlled properly for its use as a particular investment asset, Sankar said that its utility will rise as a store of value, and could draw more users away from the Rupee.
Sankar criticized the true value of cryptocurrencies 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.”
India is one of many countries where crypto companies and lawmakers have demanded greater regulatory clarity to guide their actions. Without such clarity, it is difficult for businesses to formulate long-term plans for their products and services that they are sure will not break any laws.
On the 11th of February, finance minister Nirmala Sitharaman said that she would not immediately decide whether to legalize or ban crypto leaving India in a prolonged state of regulatory limbo.
The Indian government has been experimenting with its capabilities in deploying a central bank digital currency (CBDC). Sitharaman revealed on the 1st of February that she expected to launch a digital rupee program by 2023 to boost economic growth.
