India’s central bank, the Reserve Bank of India or RBI has published an important bulletin related to the crypto industry. The report praised the innovative distributed ledger technology associated with crypto but it totally dismissed the potential of regulating such assets and called for a blanket ban.
The core concerns related to crypto that RBI laid down involved harm to the country’s financial sovereignty. It wrote that private currencies always lead to financial instability and therefore, they have evolved into fiat currencies over time.
“The retrograde step back to private currencies cannot be taken simply because technology allows it without considering the dislocation it causes to society’s legal, social and economic fabric.”
RBI believes that the recent boost in crypto adoption will continue and would lead to a danger of cryptocurrencies taking the position of the Indian rupee, which would undermine the government’s control of monetary policy.
RBI repeats its words
The disagreement between the Indian government and RBI over crypto is not a hidden thing. The central bank has called for an outright crypto ban several times in the past, as TheCoinRise reported.
However, in February, the finance minister, Nirmala Sitharaman said that the government and RBI have agreed on the most recent crypto law proposal which cites CBDC launch and 30% taxation on crypto by 2022-23.
Previously, when the RBI suggested a ban on crypto, the Supreme Court of India postponed its plans by refusing the proposal. However, the recent statements appear to be a little concern for Indian crypto investors.
While the RBI stated that private investors will be given “reasonable exits” in order to avoid losing money, it also stated:
“Persons who have invested in these instruments are fully aware of the risks involved. Investors who have acquired these instruments have done so with their eyes wide open, at their own risk, and do not warrant any regulatory dispensation.”