January 30, 2023

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India’s central bank wants to ban cryptocurrencies

Considering cryptocurrencies as a pyramid scheme, the Government of India announced in Parliament the intentions of the Central Bank of India to ban cryptocurrencies in the country.

While some countries, such as El Salvador, have made popular cryptocurrencies such as Bitcoin legal tender, countries such as China Do not do anything with them. An assumption that is now happening in India too, as the country’s government announced in Parliament on Monday.

India’s Finance Minister Nirmala Sitharaman said that the Central Bank of India has expressed concern about this.Disruptive effects of cryptocurrencies on monetary and financial stability of the country“, currently the world’s second largest online marketplace. The recommendation made by the Monetary Authority is to make a more restrictive law in this regard. His opinion on cryptocurrencies is that they should be banned.

Looking forward to the G20 meeting

The Financial Stability Board, a body made up of members from the Treasury and central banks of the G20 countries, including India, which had already been proposed earlier in July, proposed more stringent regulations at the meeting. This year in October 2022.

There will be reasons The main speculative use of cryptocurrencies And they don’t operate in a market without regulations. Regulatory regulation of these assets will be effective only on the basis of effective international cooperation and after evaluating the potential risks and benefits of the evolution of the common economy.

Strict taxes on cryptocurrency trading in India were already introduced earlier this year, the first move by the country’s central bank at the time to try to curb speculation in the sector, but they have been gradually reduced. Limitations for Cryptocurrency Trade Management Platforms

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Pyramid scam and lack of features like currency or goods

Already in February, the central bank of India’s position, its deputy governor D. In Rabbi Shankar’s words, it was very strict. In some reports regarding cryptocurrencies, he compared them to pyramid schemes based on Ponzi schemes.In addition to explaining that they are “specifically created to circumvent the regulated financial system.”

The Central Bank of India directly referred to the example The famous crisis of s tulips. Seventeenth. From the Institute, cryptocurrencies are not considered currencies, assets or commodities, lacking intrinsic value or underlying liquidity.