Recently Rabi Sankar took a powerful stance against cryptocurrency, citing the potential “volatile impact” on the country’s fiat currency.
Reserve Bank of India Deputy Governor T. Rabi Sankar likened the cryptocurrency to Ponzi schemes and said it was “highly appropriate” for the Indian government to ban and not regulate them.
We have also found that cryptocurrencies are not sufficient to be defined as a currency, asset, or commodity, ”Sankar told the audience in a keynote address on Monday.
“Cryptocurrencies are not currencies or 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.”
Sankar believes that controlling cryptocurrencies is ultimately an excuse to use them as a currency and in some cases as a currency. Controlling this is tantamount to promoting its use within the framework prescribed by the government. However, he acknowledged that some people would use crypto if it was banned, and that “despite the ban on drug trafficking, it is a widespread phenomenon.”
He further noted that allowing cryptocurrency in a Fiat-dominated ecosystem “has the potential to destabilize a country’s monetary and economic stability.” Shankar said that by restricting the use of cryptocurrency as an investment asset, its benefits would grow into a valuable store and more consumers would then be able to stay away from the rupee.
Sankar attacks the real value of cryptocurrencies:
“Furthermore, unlike monetary policy and the value of the rupee in its legal tender, the value of crypto assets is based on the assumption that others will value and use them.”
As of now, India is one of the many countries where crypto companies and legislators seek more regulatory clarity to guide their activities. Without such clarity, it would be difficult for businesses to formulate long-term plans for their products and services that would certainly not violate any regulations.
Finance Minister Nirmala Sitharaman on Friday, said that she could not immediately decide whether to legalise or ban cryptocurrencies and thus leaving India under a long-term regulatory stalemate.
The Government of India is testing its capabilities in implementing the Central Bank Digital Currency (CBDC). Sitharaman said on February 1 that she expects to launch the digital rupee program by 2023 to boost the economic growth of the nation.
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