It became the hot topic of the crypto market when India announced a new tax regime for digital currencies earlier this month. This week, T. Rabi Sankar, deputy governor of the Reserve Bank of India (RBI), likened digital currencies to a pyramid scheme. He also stated that the said bans were the best move for the country.
They have no intrinsic value, are like a pyramid scheme, and may actually be worse.
This comment by Sankar goes completely against the interpretation by some that India announced new taxes in its latest budget announcement as India adopting or at least accepting digital currencies with this move. As a matter of fact, it is clear that digital currencies are not welcomed by the government.
Sankar also rejected the idea that India should regulate digital currencies and called for an outright ban. Taking a very tough stance against cryptocurrencies, Sankar thinks that it is not possible to regulate digital currencies because they are not properly defined.
cryptocurrencies; financial assets are not real assets or even digital assets. Therefore, they cannot be regulated by any financial industry regulator.
said. These comments by Sankar are extremely important as they largely reflect the management’s approach to crypto assets.
“The fact that they are anonymous, decentralized systems that operate completely virtual makes cryptocurrencies particularly attractive for illegal, illicit transactions.” While it is clear that he does not fully understand the logic of digital currencies, Sankar’s thoughts may not be very effective when viewed from this perspective.
After all, Bitcoin is not anonymous. Allowing privacy and anonymity are two different things. And Bitcoin is not designed to be anonymous. Nor is it decentralized in the popular understanding of the term. If Bitcoin is ultimately banned in India or elsewhere, it will be largely the fault of people who misinterpret Bitcoin logic. However, while Sankar’s concerns are true up to a point, some of his assumptions are completely wrong.