India’s RBI representatives continued to launch sturdy assaults on cryptocurrency. Throughout a gathering with the Indian Banks’ Affiliation [IBA’s] Annual Banking Know-how Convention & Awards on February 14. RBI’s deputy governor T Rabi Sankar fired recent salvos by demanding an outright ban on digital belongings equating them with Ponzi schemes and ‘could even be worse’.
Banning cryptocurrency is probably essentially the most advisable alternative open to India,” Sankar mentioned throughout his keynote handle. “Now we have examined arguments by these advocating cryptos needs to be regulated and located that none of them stand as much as primary scrutiny,” he mentioned.
In accordance with RBI’s prime exec, the blockchain expertise was constructed to evade authorities controls and it’s been particularly developed to bypass regulated monetary programs just like the Know-Your-Buyer course of and AML/CFT laws [anti-money laundering and counter-terrorism financing].
These needs to be causes sufficient to deal with them with warning,” Shankar mentioned. The RBI deputy governor mentioned cryptocurrencies don’t have any underlying money flows, no intrinsic worth, and usually are not amenable to definition as a forex, asset, or commodity.
RBI head likened crypto craze to Tulip mania
Earlier February 2022, in a financial coverage assembly, RBI Governor Shaktikanta Das had additionally issued a warning to traders as they might be investing in risky belongings at their very own threat. He then went on so as to add that these cryptocurrencies don’t have any underlying [value] not even a tulip.
Das mentioned throughout a information convention following the financial coverage assembly mentioned “Personal cryptocurrency is an enormous risk to macro-economic stability and monetary stability, traders ought to hold this in thoughts that they’re investing at their very own threat,”
The RBI prime boss was in all probability referring to the Dutch tulip bubble or the tulip mania. It was one of many greatest bubbles seen in historical past. Between the time interval of November 1636 and February 1637, costs of tulip flowers surged by greater than 20 instances. When the bubble lastly collapsed, costs of tulips too fell by over 99 p.c in keeping with some estimates. It was maybe one of many first recorded cases of overtly inflated belongings.