Indian central bank governor calls for crypto ban, champions CBDCs
The Indian central bank governor called for a ban on crypto and said the country should adopt CBDCs instead as they will reduce need for printing fiat currencies.
India’s Central Bank Governor Shaktikanta Das said private crypto assets like Bitcoin (BTC) could cause the next financial crisis and should be banned as they carry “huge inherent risk,” CNBC reported on Dec. 21.
Das said cryptocurrencies have “huge inherent risks” that could endanger financial stability. He added that crypto-assets should be banned because they do not have any value and are mainly used as speculative trading tools. He reportedly said:
“(Crypto trading) is a hundred percent speculative activity, and I would still hold the view that it should be prohibited … because, if it is allowed to grow, if you try to regulate it and allow it to grow, please mark my words, the next financial crisis will come from private cryptocurrencies.”
The central bank governor said the country should embrace CBDCs over crypto as it would reduce the need to print fiat currency and help fast-track international transactions, according to the report.
India is one of the several countries working on a CBDC project. Reports have revealed that the country’s apex bank was looking to introduce a digital version of the Indian rupee.
The Asian country began retail testing of its digital rupee in select Indian cities on Dec. 1.
India’s anti-crypto stance
Several crypto stakeholders have criticized India’s anti-crypto stance.
Cardano founder Charles Hoskinson recently lamented how India’s tough crypto stance has made it difficult for the blockchain network to penetrate its market. Hoskinson said:
“India has been strongly anti-crypto, with numerous government attempts to outright ban and criminalize the use of crypto. I’d love to enter the market, but it seems to require someone intimately familiar with it.”
India has adopted a harsh stance towards the crypto industry. The Asian country implemented a 30% capital tax gains on crypto and several others tax measures designed to discourage crypto trading activities.