Partial ban on Cryptocurrencies won’t work : RBI

Partial ban on Cryptocurrencies won’t work claimed the RBI. Let us find out why they gave such a bold statement.

Introduction

In a presentation, the Reserve Bank of India said that a partial ban or lenient restrictions will not work. India needs to put a blanket ban on Cryptocurrencies.

The presentation put light on various other issues related to Cryptocurrencies. The issues were related to the untraceable nature of crypto transactions. This is due to their decentralisation. Implying that it’s impossible to know who’s making crypto transactions. Despite being on a public ledger the users use pseudonyms to execute their transactions.

Other issues were their volatile nature, issues regarding legality and their valuation.

Not a unanimous decision

The board members at the moment were split on their opinion of Crypto. Former deputy comptroller and Auditor General, Revathy Iyer expressed his desire to proceed further with extreme caution. However, on the other hand, Director General of Research and Information System for Developing Countries, Sachin Chaturvedi said that extreme steps will cut off India from the world. He highlighted the past steps taken by the government regarding Cryptocurrencies.

A Secretary in the Department of Financial Services, Debasish Panda, was also in the conference. However, he did not make any comments on the Crypto issue.

The right timing

The presentation was at a time when Cryptocurrencies are getting into discussion phase in the Parliament in the winter session. However, as this plan was scrapped, the bill was subsequently delayed indefinitely.

The RBI has never concealed their intentions of not allowing Cryptocurrencies in India. In the past, in 2018, the RBI imposed a ban on Cryptocurrencies. However, this ban received stern opposition and criticism. The Supreme Court eventually made the RBI to retract their ban.

The RBI Governor in October 2021 in an event gave some comments on Cryptocurrencies. “There is a need for much deeper discussions (on crypto). When the central bank says it has much deeper concerns from the point of macroeconomic and financial stability, there are far deeper issues involved which form part of this,” he said.

Conclusion

Partial ban on Cryptocurrencies won’t work, said the RBI. We will find that out in the near future. India and the world are optimistic about Cryptocurrencies. Expectations are that regulations will help Crypto market grow in the world.

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