India has been indecisive about whether to ban crypto or not, but it comes off as one of the nations that levy up to 28% tax on proceeds from digital currencies and their underlying trading activities.
Shaktikanta Das, the Governor of the Reserve Bank of India (RBI) has gone all bearish on crypto assets and has renewed his call for the prohibition of the nascent asset class. According to a report from TechCrunch, Das was addressing a room of banking executives and lawmakers when he pointed out that crypto can destabilize India’s economic and financial ecosystem.
“After the development of the last one year, including the latest episode surrounding FTX, I don’t think we need to say anything more. Time has proven that crypto is worth what it’s worth today,” Governor Das said, adding that a “Change in value in any so-called product is the function of the market. But unlike any other asset or product, our main concern with crypto is that it doesn’t have any underlying whatsoever. I think crypto or private cryptocurrency is a fashionable way of describing what is otherwise a 100% speculative activity.”
Trailing his previous calls, Governor Das emphasized that because crypto purveyors designed it to bypass existing financial checks and balances, it can effectively be responsible for the next global economic meltdown.
“They don’t believe in the central bank, they don’t believe in a regulated financial world. I’m yet to hear a good argument about what public purpose it serves,” he said, adding that he believes that crypto should be prohibited. “It should be prohibited because if it is allowed to grow … say it’s regulated and allowed to grow … please mark my words that the next financial crisis will come from private cryptocurrencies.”
India remains one of the major crypto hotspots in the Asian region. Despite the crackdown on the ecosystem over the past decade, the usage of crypto and the developer community has continued to blossom. While foreign-based exchanges have struggled to survive in India, local players like CoinSwitch Kuber and CoinDCX are holding the forte.
Encompassing Call for Crypto Regulation in India
Besides Governor Das, the call for regulation and perhaps, the prohibition of crypto activities in India is taking the center stage. In support of Governor Das, T. Rabi Sankar, the Deputy Governor of RBI said the implosion of the system upon which crypto is built has shown how unreliable the industry is.
“Crypto closed 2021 with the narrative that finance as we know it was slow, inefficient and clumsy. Defi and DAOs were the path forward. Crypto prices, in their own jargon, were mooning and investors were HODLing. Since May 2022, cryptos have lost some of the shine – two-thirds of their value. Failure of some entities have caused the ecosystem to unravel,” Sankar said, “The technology that was heralded as the end of government, and regulators and intermediaries — the underlying philosophy of crypto – is now frantically seeking to be regulated.”
India has been indecisive about whether to ban crypto or not, but it comes off as one of the nations that levy up to 28% tax on proceeds from digital currencies and their underlying trading activities.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
