India’s central bank wants to ban cryptocurrencies, government says

The government told the parliament that the central bank wants to ban cryptocurrencies.

The Reserve Bank of India has expressed concerns about the destabilising effect of cryptocurrencies on the monetary and fiscal stability of a country.

She said that the Reserve Bank of India believes that cryptocurrencies should be banned.

She said that it will require significant international collaboration to come up with legislation for regulating or banningCryptocurrencies. The government responded to a set of questions raised by a member of parliament.

Cryptocurrencies are borderless and need international cooperation to prevent regulatory arbitrage. Legislation for regulation or banning can only be effective if there is international collaboration on evaluation of the risks and benefits.

The Financial Stability Board, a body of regulators, treasury officials and central bankers from the Group of 20 economies, said earlier this month that it would propose "robust" global rules for Cryptocurrencies in October. Cryptocurrencies were mostly used for speculative purposes and weren't in a "regulation free space."

Further challenge to the adoption of cryptocurrencies and platforms is posed by Sitharaman.

The move by India to tax transactions and profits related tocryptocurrencies was seen as a move by the central bank to embrace the technology. In the last few months, Indian banks have sent different signals.

According to people familiar with the matter, the Indian central bank continues to force the hand of banks from engaging with cryptocurrencies in India, a move that has made on ramp a nightmare for the firms.

Informal pressure from the Reserve Bank of India led to the suspension of trading services in India. The local taxation law has led to a decline in trading volume at local exchanges.

The Internet and Mobile Association of India, an influential 18-year-old lobby group in India, turned its back on advocating forcryptocurrencies.

The central bank of India has a stance oncryptocurrencies.

The deputy governor of the Reserve Bank of India compared cryptocurrencies to a Ponzi scheme.

He said that Cryptocurrencies are akin to Ponzi schemes and may even be worse.

The 17th century Netherlands had tulips that gave impressive returns. Cryptocurrencies are very similar to gambling contracts and Ponzi schemes. It has been argued that the original scheme created by Charles Ponzi in 1920 is better than Cryptocurrencies.

Since December of last year, the Reserve Bank of India has warned users, holders and traders of virtual currency.

Customer due diligence processes for transactions in VCs, in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism, have been advised by the Reserve Bank of India.

In the wake of the uncertainty, there has been some talent moving out of the country and a growing number of local entrepreneurs building for the foreign markets.