Reserve Bank of India (RBI) Governor Shaktikanta Das called for a ban on cryptocurrencies at a recent conference. January 13thA report from India Today.
Das said the central bank’s stance on cryptocurrencies is “very clear and should be banned.” He went on to say that cryptocurrencies “have no fundamental value” and that their value is based on “fiction” and speculation.
“Frankly, it’s gambling,” concludes Das, adding that gambling is banned in India. His comments echo a similar comparison made last April by politician Bihar Sushir Kumar Modi. Gambling and lotteries are allowed in certain states of India, but the practice is largely prohibited, and illegal gambling is widespread in the country.
Das also expressed concern that allowing cryptocurrencies could undermine the powers of the RBI, which serves as India’s central bank and monetary authority. He warned that cryptocurrencies could cause India to lose control of its money supply.
He argued that acceptance of cryptocurrencies could lead to dollarization.
He said the RBI indirectly alluded to the recent FTX collapse and subsequent crash of the cryptocurrency market after previously warning of a cryptocurrency collapse. “If we see progress, I don’t think we need to add anything more,” he said.
Das and RBI have indeed issued similar warnings since at least late 2021.
Despite various reports that India is pursuing a near-total ban on cryptocurrencies, the country has yet to explicitly ban the use of cryptocurrencies. and India is pursuing a regulated CBDC.
However, the state has imposed a very high 30% tax on capital gains earned through cryptocurrency trading in 2022 (alongside a 1% tax on trading).