Reserve Bank of India Moves to Ban Cryptocurrencies
The authorities in India have been aggressive toward cryptocurrencies since they got introduced within the region. In 2018, it was declared by the Reserve Bank of India that no permission would be given to the banks to carry out contracts related to crypto. Nonetheless, at the start of 2020’s March, the outright ban on cryptocurrencies was refuted on the behalf of the Supreme Court of India.
Even after that, the consumers, traders, and HODLers of cryptocurrencies have been cautioned by the RBI regarding the hazards involved in these operations. In addition to this, it has been recommended that regulated organizations keep on doing their activities while focusing on their client’s security as well as the effectiveness of the transfers.
Cryptocurrencies May Get Banned Now
A recent statement issued by the India Finance Minister – Nirmala Sitharaman – pointed out that the central bank of the country is pretty apprehensive regarding the destabilizing effect caused by the virtual currencies on the country’s fiscal and monetary stability. While keeping this scenario in view, it has been suggested that the respective space should have the implementation of proper legislation.
She also stressed that in the opinion of the RBI a restriction on cryptocurrencies. According to the Reserve Bank of India, cryptocurrencies do not come under the category of normal currencies as each modern money requires to be released on the behalf of the authorities or the central bank of a country.
Expressing her remarks on such things and explaining the de-stabilizing effect put by the cryptocurrencies, Sitharaman stated that moreover, fiat currencies’ value is controlled by their position as legal tender as well as the monetary policy. Nevertheless, she added, the only thing on which the cryptocurrencies’ value rests is speculations as well as the expectations of huge returns that are uncontrolled.
Indian Finance Minister Admits Crypto’s Decentralization
Notwithstanding the intention of RBI to bank cryptocurrencies, it was brought to the front by the minister that their definition classifies them as borderless and they need worldwide collaboration to avoid regulatory arbitrage. Hence, in the case of any prohibition to be efficient, cooperation is a necessary thing, Nirmala emphasized.
In her words, any legislation centered around the restriction on the crypto requires to have an assessment of standards, common taxonomy, benefits, and hazards to become effective. Formerly in 2022, the decision of India to implement a tax on crypto transfers along with 1% TDS got severe reactions from the crypto consumers.
