One authority figure at The Reserve Bank of India is seemingly looking to put a blanket ban on crypto as a way to preserve traditional money.
With India being a highly blockchain technology-focused country, it has some strict regulatory measures on crypto and has not deemed it as a legal tender. Despite the regulated framework for cryptocurrencies in India, some authority figures are exploring the idea of banning digital assets for good.
The Deputy Governor of India’s Reserve Bank Shri T. Rabi Sankar posted a statement regarding cryptocurrencies and addressed high-ranking officials at the Indian Bank’s Association.
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According to Sankar, cryptocurrencies may push out fiat currency, destabilizing traditional money, and devaluing the Rupee. Likewise, the deputy governor mentioned that digital assets remind him of Ponzi schemes, and regulations would only encourage more people to start using crypto.
The deputy governor highlights the issue of double-spending that may emerge from cryptocurrencies, stating:
"The basic problem they had to get over was as follows – since electronic money (just some lines of code) can be easily replicated, in the absence of a trust institution like a bank, how does the network ensure that the same currency is not spent again, and again."
Sankar seems to be highly opposed to even the idea of regulating cryptocurrencies, stating that they "are not currencies, or financial assets or real assets or even digital assets, and cannot be regulated by any financial sector regulator."
As a result, the deputy governor thinks that crypto assets are strictly to "evade Government controls and bypass the regulated financial system" which, according to him, is reason enough to refrain from digital assets:
"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 may even be worse."
Sankar concluded his statement by deeming that digital assets take away the power from the government to regulate the country’s economy, because crypto threatens "the financial sovereignty of a country and make it susceptible to strategic manipulation by private corporates creating these currencies or Governments that control them."
