The Reserve Bank of India has been an outspoken critic of cryptocurrency, calling it a tool for money laundering not once but several times. Reserve Bank Governor Shaktikanta Das on Thursday Described cryptocurrencies As an “obvious threat” and said that anything that derives value on the basis of belief, without any underlying, is just speculation under a sophisticated name.
The central bank has repeatedly warned users, holders and traders of virtual currencies about the potential financial, operational, legal, customer safety and security-related risks they are exposing themselves to. As TDS implementation rules begin today, we take a look at RBI’s stance on cryptocurrencies in India.
Warning
In 2013, the RBI issued a circular warning the public against the use of virtual currencies. The circular asked traders to stay away from cryptocurrency trading as crypto is a volatile market and warned about all the risks associated with trading in digital assets. It also noted that it is closely monitoring developments in the world of virtual currency, including bitcoin, litecoin, and other altcoins. It also raised doubts about the number of investors trading cryptocurrencies and their claimed market cap.
On February 1, 2017, RBI issued another circular reiterating its concerns with virtual coins. And by the end of 2017, a warning was issued by the RBI and the Ministry of Finance clarifying that virtual currencies are not legal tender.
complete ban on crypto
Former deputy governor of RBI BP Kanungo and then chairman of the Central Board of Direct Taxes (CBDT) Sushil Chandra spoke in favor of banning cryptocurrencies. Chandra said this creates “a chain of black money”. He also mentioned that searches conducted in exchanges dealing with virtual currencies have shown that most of the unknown people in internal locations are being lured to buy it.
On April 6, 2018, RBI issues a circular asking commercial and co-operative banks, payments banks, small finance banks, NBFCs, and payment system providers to provide services to all entities dealing in virtual currencies, or dealing with crypto exchanges. Is.
‘Crypto value is worth nothing’
In November 2021, Governor Shaktikanta Das reiterated his views against crypto, saying it poses a serious threat to the financial system as they are regulated by central banks. His remarks came ahead of RBI’s internal panel.
In February, RBI deputy governor T Rabi Shankar said banning private cryptocurrencies was the best option for the country. Shankar was speaking at the IBA Banking Technology Awards. “They (cryptos) threaten the financial sovereignty of a country and make them susceptible to strategic manipulation by private corporations controlling these currencies or governments,” Shankar said. “All these factors lead to the conclusion that banning cryptocurrency is probably the most appropriate option for India.”
Earlier in May, Governor Das said that crypto poses a serious threat to any financial system as they are unregulated by central banks. This was the time when the RBI announced its intention to come up with an official digital currency. Shaktikanta Das said that after the cryptocurrency market crash people must have raised questions that RBI was regulating digital assets till now.
“We are taking precautions against crypto and let’s see what has happened to the crypto market now. If we had been regulating this already, people would have questioned what happened to the regulations,” Das told CNBC TV18 in an interview “It is something that has nothing inherent (value). There are big questions on how you regulate it. Our position is very clear, this will seriously undermine India’s monetary, financial and macroeconomic stability,” the RBI governor said.