India is expected to explore various crypto regulatory frameworks that include the possibility of banning them completely.
In a report released today, the Reserve Bank of India (RBI) said that crypto assets are highly volatile and show a high correlation with the current stock market. Such is the similarity that they contradict the company’s report and say that virtual assets are another means of profiting because of the supposed inflationary benefits associated with them.
Scientific and Developmental Processes
India announced on Thursday that during its current G20 presidency, it will prioritize the development of a framework for global regulation of cryptocurrencies, stablecoins and decentralized finance (DeFI). In addition, India said it will examine “possible bans”, which could be a major setback for the industry as it continues to grow.
“To address financial stability risks and protect investors, it is important to adopt a common framework for crypto assets,” the Financial Stability Report of the RBI released on Thursday. The RBI has issued a warning echoing the sentiments of other central banks around the world, saying that crypto could “displace money from traditional money” with a major impact on the real economy, if it is becoming more and more common in traditional financial systems.
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Will India Ban Crypto?
As part of the development of the regulatory framework for cryptocurrencies, the report shows that different options are being considered internationally. One of them is to hold them to the same standards that apply to traditional financial institutions and stock exchanges. However, they are open to banning crypto markets altogether. Information obtained from the report indicates that:
“Another option is to ban crypto-assets, because the cases of their real use are almost negative and the challenge is that different countries have different legal systems and individual rights vis-à-vis civil rights.”
One of the biggest critics of the cryptocurrency industry is India’s central bank. Last week, RBI Governor Shaktikanta Das issued a warning, saying that unless private cryptocurrencies are banned, more financial problems will be caused by their use.
Cryptocurrency, according to Das, has its roots in the idea that it is wrong or corrupting the current financial system. “They don’t believe in a central bank” or a controlled financial system, Das said. He went on to add that he thinks the crypto market should be banned and said, “I haven’t heard a good argument about the public purpose served.”