27. February 2024

• RBI Governor Shaktikanta Das has called for an outright ban on cryptocurrency, calling it nothing more than gambling.
• The RBI has previously voiced its opposition to digital currencies and has even launched its own central bank digital currency.
• Das stated that cryptocurrency cannot be considered as a financial product and must be treated like “gambling activities.”

The Reserve Bank of India (RBI) is taking a hard stance on cryptocurrencies, with its Governor Shaktikanta Das calling for an outright ban. During a conference on Friday, Das stated that these assets are nothing more than gambling and must be treated like “gambling activities.”

The RBI has been vocal about its opposition to digital currencies, taking a lead over other central banks by launching its own central bank digital currency (CBDC) late last October. Das explained further why he wants an outright ban on cryptocurrencies, noting that besides the commonly known danger of terror funding associated with these asset types, their definition is very unclear.

“Some people call it as an asset, while others call it as a financial product and if that be the case, it has to have some underline,” he said. “In the case of crypto, there is no underline.”

In a recent statement, the RBI said: “Crypto is not a financial product then, therefore it’s masquerading as a financial product or asset is completely a misplaced argument.” The RBI’s official stance on bitcoin comes after reports that the system implemented by the now-defunct exchange FTX has failed. The report also mentioned that there are rumors about the RBI’s involvement in the development of a domestic cryptocurrency.

Despite the RBI’s hard stance on cryptocurrencies, India’s crypto industry is growing at a rapid pace. The country’s crypto exchanges have seen a significant increase in trading volumes and new investors are entering the market every day. Moreover, several prominent Indian tech companies, including Flipkart, Zebpay, and Unocoin, have launched their own crypto trading services.

Despite the RBI’s efforts to discourage the use of digital currencies, the Indian government has recently taken a more positive stance. The government is reportedly looking into creating regulations for the crypto industry, and has even set up a panel to come up with a comprehensive plan for the sector.

The RBI’s stance on cryptocurrencies has created a lot of uncertainty in the Indian crypto industry, but the government’s recent move to create regulations and the increasing popularity of digital currencies in the country may lead to a more positive outcome in the future.