Shaktikanta Das, the Indian Central Bank governor, said that crypto is gambling. The governor also called for a blanket ban on crypto at a Business Today event.
Adding to the statements, Das said that crypto does not possess any inherent value other than make-believe. They are not even a tulip, referencing the Dutch tulip mania blowup.
As per the governor, every financial asset and product must boast some underlying value. However, crypto is speculation, even gambling. Since India has banned gambling, crypto should also not be allowed – at least, rules should be laid for gambling.
Another reason for the RBI (Reserve Bank of India) to ban cryptocurrencies is that they threaten the central bank. Once crypto achieves mainstream adoption, it’ll affect banks’ ability to formulate monetary policies.
Das pleaded that these weren’t fake red flags, and the RBI had already discussed it a year ago. Seeing how the crypto industry has developed over the previous year, especially the FTX scenario, does not leave much to be added.
Conversely, the governor showcased support for CBDCs (Central Bank Digital Currencies.) Das called them the future of money, stating that India has started a program for digital currencies with nine banks.
Despite this, the RBI is maintaining a rough stance against digital assets can impact many crypto related business. The statement that these crypto tokens are nothing but gambling is certain to dishearten many users. Furthermore, this might bring the future of several crypto firms and crypto gambling sites into uncertainty.
The central bank has warned the government and investors against cryptocurrencies, citing them as volatile and risky.
The bank even asked the government to ban them, as they could destabilize the monetary stability. India is currently the G20 president and wants to collaborate for global crypto regulation. Similarly, it is agreed that the G20 countries will study the impacts of cryptocurrency, the banking sector, and monetary policy to understand the likely impacts they can have and to bring the needed policy census.