India’s Strict Cryptocurrency Aims for Total Ban?

The Central Bank of India has long shown strong hostility to crypto. Ever since cryptocurrencies gained popularity in India, which makes up 17.7% of the world’s population, the Reserve Bank of India (RBI) has been looking at ways to regulate the sector.

RBI Governor Shaktikanta Das once again expressed serious concerns about industry regulation. This has put crypto investors and enthusiasts on high alert as the annual budget deadline approaches. The Central Bank of India has issued a stern warning against the use of Bitcoin and other cryptocurrencies.

The FTX crash made things even worse. Governor Shaktikanta Das has repeatedly called cryptocurrencies “a precarious instrument.” This is “gambling,” as private digital assets have no intrinsic value.

At the Business Today Banking and Economy Summit, Gov. Shaktikanta Das argued that personal digital assets should be banned because they have “deceptive elements.” He also said that cryptocurrencies are just “a world of 100% speculation.”

Dollarization of the Indian economy

RBI Governor Shaktikanta Das has stressed that the FTX crash has proven how damaging the economy is for cryptocurrencies to be a speculative industry. India has previously said that the influx of personal digital assets will cause dollarization of the economy, which is not ideal for the nation.

Speaking at the event, Das echoed the same sentiment, stating that “increased use of cryptocurrencies will lead to increased dollarization, which may go against national sovereignty.” Not only is the dollarization of the economy concerned with India, but so is the regulatory framework for digital assets.

Ironically, despite concerns about the same, India has yet to finalize legislation to regulate the industry for years. did not suggest Instead, she said India aims to introduce a technology-driven regulatory framework to better regulate assets.

So is India ill-equipped to regulate cryptocurrencies?

The question remains whether the Indian government is competent enough to regulate the industry. All hostility towards the industry may be a hoax to discourage enthusiasts from leaving the industry.

The RBI also said private digital assets could cause “financial instability” and that if private cryptocurrencies were allowed to operate in the country, the RBI would “fail” to monitor these transactions. It is highly probable,” he said.

Das added:

A cryptocurrency masquerading as a financial asset is a completely irrelevant argument. Our country does not encourage gambling.

Calling cryptocurrencies a form of gambling does not distract from the fact that the Indian government actually admits that it does not have proper rules for managing wealth. It remains to be seen whether India will be able to develop a regulatory framework to bring more scrutiny to digital assets before her 2023 annual federal budget.