T Rabi Shankar, the deputy governor of the Reserve Bank of India, the country’s central bank, proposed an outright ban on cryptocurrencies on Monday, assuring the central bank’s position to prohibit digital assets has not changed since the 30% tax on crypto income was announced.
Fast facts
- Shankar said he found no merit in the arguments in favor of regulating crypto over banning it.
- Calling cryptocurrencies worse than Ponzi schemes with no underlying cash flows or intrinsic value, Shankar said that digital assets cannot be treated as a currency, asset or commodity.
- “More substantially, they can, and if allowed most likely will, wreck the currency system, the monetary authority, the banking system, and in general, government’s ability to control the economy,” Shankar said.
- The deputy governor echoed RBI governor Shaktikanta Das’ recent comments, when the central bank chief warned investors of risks associated with cryptocurrencies, stating digital assets are “not even a tulip.”
- Finance minister Nirmala Sitharaman on Monday said the government and RBI are working in “complete harmony” and that any decision on crypto will be made jointly.
- The RBI has consistently asked for a ban on crypto for years, and is working on its own central bank digital currency, which is scheduled to be launched in fiscal year 2023.