The Reserve Bank of India stated Bitcoin may impact the region’s financial stability while Warren Buffett of India said that regulators should ban it
The Reserve Bank of India (India RBI), the country’s central bank, said cryptocurrencies may impact the region’s financial stability.
India RBI: Cryptocurrencies can cause Financial Instability
RBI governor Shaktikanta Das said cryptocurrencies were a major concern, adding the bank had highlighted the points to the country’s central government. The statements marked the second instance issued by the RBI with regards to the crypto market in two weeks.
Last week, the Indian administration proposed a blanket ban on all private cryptocurrencies and called for the creation of a framework for an official digital currency issued by the RBI instead. Das confirmed that development today, stating the bank RBI was very much in the game in that regard.
He added:
“The project was receiving our full attention and that both the technical and regulatory aspects were currently being worked on.”
Despite the negative comments, crypto proponents are continuing to fight for the cause. Local crypto exchanges and crypto lawyers have formed a legal coalition in the past years to work with the government to help create a regulated, safe framework for the use of cryptocurrencies in the country.
Dr. Srivatsa Krishna, an official of the country’s premier civil services agency, the Indian Administrative Service, stated:
“Some high-ranking officials have joined in on the movement as well. “t can be a true game-changer for India. Indeed, Bitcoin can be misused but so can Google Maps! Don’t ban it, regulate it smartly.”
Krishna questioned the government’s pessimist approach to cryptocurrencies and warned that citizens could lose out on a wealth creation opportunity. He further added that the government simply did not understand the potential of cryptocurrencies and was instead taking the safer route of banning the sector outright.
The country had previously barred all state-owned and private banks to transact with crypto exchanges in 2018, but the Supreme Court later overturned that dictum in May 2020. While this served as a brief respite, the anti-crypto narrative has swiftly returned.
One of India’s most prominent investors said that regulators should ban BTC
Rakesh Jhunjhunwala, dubbed the “Indian Warren Buffett”, slammed Bitcoin, calling the largest cryptocurrency by market capitalization speculation of the highest order.
One of India’s most prominent investors, Rakesh Jhunjhunwala, dubbed “Warren Buffett of India
According to Jhunjhunwala, the cryptocurrency market hangover will be much worse than the euphoria from the gains posted by tokens. The negative comments are keeping in with similar sentiments espoused by Warren Buffett, who once called Bitcoin rat poison squared.
The billionaire investor also advocated for a ban on cryptos, stating:
“I think regulators should step in and ban bitcoin.”
The Indian billionaire sentiments are at odds with the growing crypto community in India that has routinely expressed frustration at the lack of clear-cut regulations in the country. Also, they differ from the growing acceptance of BTC among the institutional investment class in the United States.
Indeed, some U.S. companies like MicroStrategy and Tesla have added BTC to their balance sheets. Before the current price correction, Tesla had reportedly seen its Bitcoin outlay print about $1 billion in profits in barely a fortnight since the investment became public.
Jhunjhunwala’s comments are coming at a time when speculation is rife that the Indian government will soon issue a blanket ban on cryptocurrencies. Earlier in February, reports emerged that the total crypto prohibition will see holders given a grace period to liquidate their virtual currency holdings.
India’s crypto community has been forced to grapple with negative cryptocurrency policies from the government. Back in March 2020, the Supreme Court overturned a ban by the central bank prohibiting commercial banks from servicing crypto exchanges.
Even after the reversal of the ban, some exchanges still reported facing difficulties in opening bank accounts with commercial banks in the country.
For Jhunjhunwala, India’s government should focus on creating a digital rupee. Indeed, the subject of central bank digital currencies (CBDCs) is increasingly becoming more popular in several countries, with pilot tests being carried on sovereign digital currencies.
The Indian government’s crypto aversion has not, however, spread to the blockchain. Several state agencies have announced plans to adopt the novel technology as part of their operations.
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