The Reserve Bank of India’s (RBI) deputy governor has compared cryptocurrency to Ponzi schemes. T Rabi Shankar, the Deputy Governor, even suggested that ‘banning’ cryptocurrency was the best option for India in a speech.
He further added, “We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi schemes, and may be even be worse.”
“All these factors lead to the conclusion that banning cryptocurrency is perhaps the most advisable choice open to India.”
Last week, India’s central bank head issued a strong warning about investing in cryptocurrencies, claiming that they lack the fundamental value of even a tulip, a reference to a speculative bubble that engulfed the Netherlands in the 17th century.
Nirmala Sitharaman, India’s finance minister, delivered the Union Budget 2022 earlier this month. The Indian government declared in this year’s budget that profits from cryptocurrency investment will be taxed at a hefty rate of 30%. The legality of cryptocurrencies which aren’t issued by the government, on the other hand, is still up in the air.
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India will also introduce a digital rupee. On Monday, Sitharaman stated that she is in talks with the Reserve Bank on a central bank-backed digital currency, and that a decision will be made after careful consideration.
She stated that talks with the RBI about the CBDC (Central Bank Digital Currency) began before the Budget announcement and are still ongoing.
RBI Governor Shaktikanta Das noted that, like a number of other concerns, this one is being discussed internally by the RBI and the government.
He added, “Whatever points we have we discuss with the government.”
CBDC is a digital or virtual currency, although it differs from the private virtual currencies and cryptocurrency that have exploded in popularity over the previous decade. Because there is no issuer, private digital currencies do not reflect any person’s debt or liabilities. They aren’t money, and they aren’t even close to becoming currency.