The deputy governor of the Reserve Bank of India (RBI), the country’s central bank, has come out in support of banning cryptocurrencies in the world’s second-most populous nation.
RBI Deputy Governor Doubles Down On Anti-Crypto Stance
The RBI deputy governor has poured cold water on any hopes that India could soon take the regulatory and legalization path.
T. Rabi Sankar argued that a ban is favored over crypto regulation. “We have examined the arguments proffered by those advocating that cryptocurrencies should be regulated and found that none of them stand up to basic scrutiny,” said the central bank deputy governor.
Some in the Indian crypto community have had several demands for the government, including that it classifies cryptocurrencies and establishes a regulatory framework for the crypto industry.
Nonetheless, the central banker is opting for a ban instead of legitimizing the sector as he strongly believes in cryptocurrency’s potential to encourage “anti-social activities”. Sankar also expressed reservations about the growth of cryptocurrencies, saying they pose risks to the nation’s economic system.
Bitcoin Ban Has Previously Been Considered
Regulators in India have grappled with the possible outlawing of cryptocurrencies for years.
India’s central bank prohibited banks from facilitating crypto transactions in 2018, though the policy was reversed by the Supreme Court in March of 2020. In 2019, a draft bill was proposed, seeking to outrightly ban crypto usage. Indian legislators floated a similar bill in Jan. 2021 to ban private cryptocurrencies in the country.
Early this month, India’s finance secretary T.V. Somanathan asserted that cryptocurrencies “will never become legal tender”, adding that a complete ban in the country remains a possibility.
In the meantime, India is heading towards a central bank-backed digital currency. It’s safe to assume the Indian government, like China’s, harbors the opinion that creating a CBDC will curtail the mushrooming of decentralized cryptocurrencies like bitcoin. The Reserve Bank of India plans to launch the digital rupee within the 2022-2023 time frame.