Reserve Bank of India Governor Shaktikanta Das does not like crypto. In fact, he wants to get rid of them and ban them, saying they are “nothing but gambling”.
Das said in his speech at a conference on Friday that RBI’s stance on cryptocurrency is changing. The bank official revealed that digital currency cannot be considered as a financial product and should be considered as a “gambling activity”.
The RBI has expressed its opposition to these currencies and has taken a step ahead of other central banks by creating its central bank digital currency (CBDC) at the end of last October.
Why India RBI Governor Wants to Ban Crypto
Das explained in detail why he wants a ban on cryptocurrencies. He said that in addition to the well-known risk of terrorist financing related to these types of assets, their definition is very complicated.
“Some people call it a valuable thing, while others call it a financial product and if so, it needs to be clarified,” he said. “In the case of crypto, there is no emphasis.”
Bitcoin is a hot topic in India, but the government is not taking it lightly. In a recent statement, the RBI said: “Therefore, Crypto is not a financial product, so imitating a financial product or property is a wrong argument.”
The official RBI position on bitcoin comes after reports that the system installed by the current FTX exchange has failed. The report also mentioned that there are rumors about RBI’s plan to ban digital currency in India.
However, on a macro level, the RBI Governor said: “Cryptocurrencies can become a revolutionary way of doing business. Most of it is dollars and if it is allowed to be 20% of transactions that are done through crypto, that means that it is not done by central banks and companies that give it in secret around the world.
If that happens and people start using crypto instead of dollars – and they do – then the RBI will lose control of the money that gives money to the economy.
Bitcoin and The Impact of the US Dollar
Some analysts say that if bitcoin is really a financial product, then there will be specific rules for it. But it is not like that.
In fact, most digital currencies use dollars. This means that fiat money is used for transactions, which means that they are not issued by a central bank and do not control the money that gives money to the economy. That also means that the RBI has lost control over it. Meanwhile, the warning that the regulation of bitcoin will increase the dollar of the economy, Das said that the statement that the digital asset is changing as a financial product or currency is completely false.