India and cryptocurrency aren’t the best friends, and their relationship hasn’t been good lately.
- RBI is against providing legal status to cryptocurrency
- Government seeks global collaboration to put a ban or effective regulation
The Monsoon Parliament session that began today did not bring very good news for the crypto community.
Reserve Bank of India has asked the Government to frame regulations related to cryptocurrency and ban them.
While answering a question in Lok Sabha, Finance Minister Sitharaman said, “In view of the concerns expressed by the RBI on the destabilising effect of cryptocurrencies on the monetary and fiscal stability of a country, the RBI has recommended for framing of legislation on this sector. The RBI is of the view that cryptocurrencies should be prohibited”.
Why is Crypto despised so much?
The whole structure in which cryptocurrency stands is decentralization, transparency and borderless nature.
Any Banking Institution doesn’t have a say in its regulations and doesn’t control its flow. No wonder something that is not under control is always taken as a threat.
Also, its borderlessness can promote terrorist funding and threaten a nation’s security due to which it has come under Government’s radar.
There is speculation that Government might introduce legislation to regulate cryptocurrency.
The Government, however, seeks “global collaboration” to bring in the requisite law or to put a total ban.
Additionally, there has not been a clear stance by the Government on Digital currency, which has led to even more confusion in the crypto community.
India has seen significant resistance from the Government, which has led many crypto enthusiasts to shift their base to Crypto friendly countries.
This will not only lead to a major brain drain but will also portray India negatively.
Any country, for that matter, should try to work in tandem with the new technology rather than banning it outrightly.
The solution lies in bringing effective regulations and working around a solution as to how one can get the best of both worlds.
One can hope that the Government will come up with something constructive, and their decision will be in crypto community’s favour.