- The governor of the Central Bank of India, Shaktikanta Das, sees cryptocurrencies as a high risk that could cause the next financial crisis due to their inherent risks, which is why he has suggested a ban on these assets.
- Shaktikanta Das suggested working on central bank own currencies (CBDCs)
- The digital rupee is a project worked by the authorities for the last few months and since December 1 it has begun to be tested in some local cities.
With a population of more than 1,380 million people, India is the second most inhabited country in the world and a more than interesting market for any investment, this, of course, includes the crypto market.
According to an analysis carried out by the specialist research company chainalysisIndia appears as the fourth country most interested in digital assets, only behind Vietnam, the Philippines and Ukraine. In the ranking it appears ahead of the United States, Russia, China, Pakistan, Brazil and Mexico, for example.
As we can see here, cryptocurrencies are stomping, however for years their legal status has hung from a thread between regulation and prohibition, the latter is the position of the Central Bank.
National central bank bets on restricting crypto operations
As described CryptoSlate, The Governor of the Central Bank of India, Shaktikanta Das pointed out that Bitcoin (BTC) and the rest of the digital assets could “cause the next financial crisis”, since they carry “enormous inherent risk”.
Thus, he sees no alternative but prohibit them and suggested that they work in their own currency, that is, in a Central Bank Digital Currency (CBDC). Added to the advantage of controlling movements is the possibility of creating money without the need to print it.
“Crypto trading is a 100% speculative activity, and I would still hold the view that it should be banned. If it is allowed to grow, if it is tried to be regulated and allowed to grow, please mark my words, the next financial crisis will come from private cryptocurrencies, those that have no value”, Das expressed.
His statement reveals fear, which he does not hide. However, what is not clear is whether he is afraid of what these assets could cause or that traditional assets lose power at the hands of what is considered future.
Focus on the digital Rupee
The alternative offered by the governor of the central bank is not new, but it is novel. The countries that launched their CBDC are counted since only eleven nations have their digital currency in operation according to the report of Atlantic Council.
The digital rupee is a project worked by the authorities for the last few months and on December 1, in some local cities, it has already begun to be tested. Depending on the results, it will be analyzed to continue or abort the plan.
Crypto regulation in India
As we mentioned at the beginning, India’s position is not new and has been discouraging the market for a long time. Cryptocurrency capital gains must pay 30% tax and have taken other tax measures to hinder it. If this continues, India could leave the top 5 countries with the largest number of users.
“India has been strongly anti-crypto, with numerous attempts by the government to outright ban and criminalize the use of cryptocurrencies. I would love to get into the market, but it seems like it takes someone intimately familiar with it.”Cardano founder Charles Hoskinson revealed a short time ago.
India, due to its potential, is called to be one of the leading countries of the future and its position regarding cryptocurrencies can play a determining role in the advance or brake of digital assets.
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