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India’s central bank wants to bring back ban on cryptocurrencies

India’s Finance Minister Nirmala Sitharaman answered in Lok Sabha that the RBI wants a ban on cryptocurrency, but international consensus is required first

“(The) RBI (Reserve Bank of India) is of the view that cryptocurrencies should be prohibited,” read the statement tabled by India’s Finance Minister Nirmala Sitharaman tabled in the monsoon session of the Lok Sabha. Sitharaman added that the RBI has urged the government to frame a legislative framework for crypto assets given the “destabilising effect of cryptocurrencies on the monetary and fiscal stability of a country”. Why it matters: It is no surprise that the RBI is not a fan of crypto assets. It has put out multiple statements in the last two years indicating that it is going to ask for a ban in its recommendation to the government. The announcement is significant as the RBI is a key stakeholder and its recommendations hold sway within the corridors of the finance ministry. The RBI’s stance against crypto assets plunges the crypto sector into more uncertainty as the Union government deliberates upon a regulatory framework. Importance of global support: The statement explained that cryptocurrencies are “borderless” and the government will require international collaboration to “prevent regulatory arbitrage”. “Therefore any legislation for regulation or for banning can be effective only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards,” read the statement. Concerns registered by the RBI: The statement revealed that India’s central bank has registered several concerns over the adverse effect of crypto assets on the Indian economy. It wrote that cryptocurrencies cannot be recognised as currency because every modern currency…

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I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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