Crypto Exchange
Governments Must Collaborate to Properly Regulate or Ban Crypto, Reserve Bank Of India Governor
The Reserve Bank of India wants to ban or limit crypto, but it recongnizes that global collaboration is needed to achieve that goal.
On July 19, India’s Finance Minister Nirmala Sitharaman said in a speech at the Lok Sabha, the lower house of India’s bicameral Parliament, that crypto is a danger to international regulatory arbitrage and that they should be blocked or banned.
Sitharam explained that any attempt to regulate or ban crypto should be global because cryptocurrencies are borderless. But the decentralized nature of crypto transactions and the fact that they operate outside of the traditional financial system has made task extremely hard for regulators.
According to Sitharaman, there should be international collaboration to assess the risks and benefits that cryptocurrencies pose for the global monetary policy. She further stated that, unlike fiat money, cryptocurrencies have no value beyond being used for speculation.
“The value of fiat currencies is anchored by monetary policy and their status as legal tender. However, the value of cryptocurrencies rests solely on the speculations and expectations of high returns that are not well anchored,”
A “Clear Danger” To The Economy
Shaktikanta Das, Governor of the Reserve Bank of India, said in the bank’s annual report that cryptocurrencies are a “real danger,” and given their lack of any real value beyond pure belief, they can only be considered as a speculative tool with “a sophisticated name.”
“We must be mindful of the emerging risks on the horizon. Cryptocurrencies are a clear danger. Anything that derives value based on make believe, without any underlying, is just speculation under a sophisticated name”
The RBI is therefore recommending formulating a proper legislative framework to limit the cryptocurrency industry. Even though the finance minister thinks they should be banned.
