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RBI Gov calls for an outright ban on cryptocurrency as Union Budget 2023 approaches

Recently, the RBI governor expressed his concern towards crypto regulation and its growing demand in the country. This is a worrying sign for the crypto industry as the annual Union Budget approaches.

Nidhi Bhardwaj

New Delhi,UPDATED: Jan 16, 2023 13:17 IST

RBI Gov calls for an outright ban on cryptocurrency as Union Budget 2023 approaches

By Nidhi Bhardwaj: On Friday, the Governor of the Reserve Bank of India, Shaktikanta Das, expressed his opinion on the increasing demand for cryptocurrencies in the country and its drawbacks, at the Business Today Banking and Economy Summit.

While talking about the position of crypto in the Indian economy, Das said, ” crypto should be banned, given its no underlying value in the market. Just like every asset, every financial product comes with some underlying value, hence the value of crypto is totally based on the make-believe factor.” At the event, Das continued to say, “Crypto is a form of gambling without any underlying value and is nothing but a 100 percent speculation world.”

This is a worrying sign for the crypto industry in India, especially when the annual Union Budget is just a few days away.

RBI’s intention to ban crypto

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 stressed the central bank’s view of banning Bitcoin and Ethereum in the wake of its growing demand.

The Governor at the event mentioned that “If crypto is allowed in India, the RBI may likely fail in monitoring the transactions.”

“Crypto masquerading as a financial asset is a completely misplaced argument,” he added. While counting crypto as a form of gambling, Das described, “Our country does not promote gambling, and if people still want to continue investing in it, lay down proper rules for the same.

He further claimed, “Crypto is not a financial product but pure gambling, and called for an outright ban on it.”

What’s more?

RBI’s governor, while pointing towards the recent FTX collapse, voiced his concerns on the future of this currency, which could be dangerous for the economy. Speaking at the event, he said, “Dollarisation would increase due to rising crypto usage and may act against the country’s sovereign interest.”

Das focused on the aspect of a regulatory framework for cryptocurrencies. As mentioned, the government has been continuously working on a crypto bill for many years. In October, Nirmala Sitharman expressed her take on discussing crypto regulation at the G20 Summit to launch a technology-driven regulatory framework for crypto assets.

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