Finance & Economics

India’s Central Bank Calls for Outright Ban on Crypto

The head of India’s Central Bank has called for a blanket ban on cryptocurrency, again.

India’s Central Bank fears banks will lose power to influence monetary policy and liquidity to cryptocurrency adoption.
Source: Unsplash

The Reserve Bank of India (RBI) has issued a stark statement regarding the use of Bitcoin and other digital currencies. RBI governor Shaktikanta Das has likened cryptocurrency to gambling, with a perceived value of “nothing but make-believe”.

Interestingly, the RBI has recently launched its own digital currency — an e-rupee called the central bank digital currency (CBDC), first available for wholesale and a month later for retail customers.

Das reiterates the need for an outright ban on crypto.

“Every asset, every financial product has to have some underlying (value) but in the case of crypto there is no underlying… not even a tulip… and the increase in the market price of cryptos, is based on make-believe.”

The governor went on to call crypto gambling. Following these obtuse statements, Das explained the “macro” reason for banning cryptocurrency is its potential to become a means of exchange, that is, a means of completing a transaction (without a third party). This means that central banks will lose the percentage of money supply in the economy, as well as their ability to decide on monetary policy and liquidity levels.

Of course, reasons listed by the governor of the Reserve Bank of India to ban cryptocurrency are the very reasons it was created — to become a means of transaction unmoderated by unnecessary third parties, allowing people privacy and actual autonomy of their money.