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July 18, 2022

RBI India Determined to Ban Crypto

Over the last several years, India has changed its mind many times about whether to permit the usage of cryptocurrencies there. Indian Finance Minister Nirmala Sitharaman said on Monday that the Reserve Bank of India (RBI) is eager to prohibit the usage of cryptocurrencies in the nation.

Her recent remarks to parliamentarians demonstrate the rising ambiguity surrounding digital assets. The RBI has voiced worries about the disruptive impact of cryptocurrencies on a nation’s monetary and fiscal stability, according to the Indian finance minister.

In addition, Sitharaman said that “RBI is of the opinion that cryptocurrencies should be forbidden” while discussing the need for regulation in this area. Sitharam said that any regulatory legislation or a decision to outlaw them would need substantial international collaboration. The Indian Finance Minister said what was in the draft:

Since cryptocurrencies are by nature borderless, international cooperation is necessary to avoid regulatory arbitrage. Therefore, any legislation intended to regulate or outlaw anything may only become effective after extensive international cooperation on the assessment of the risks and benefits as well as the development of a common taxonomy and criteria.

India enacted a strict 30 percent tax on the proceeds from cryptocurrency trading earlier this year. The purpose of enacting such a high tax was to deter investment. As trade volumes decreased at cryptocurrency exchanges over the last several months, the tax regulations did have an effect.

Banks, on the other hand, have severed links with significant cryptocurrency exchanges. The Indian liquidity entering the crypto market has been significantly impacted by this. Due to unofficial pressure from the RBI, cryptocurrency exchange Coinbase was forced to discontinue its services in India.

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Indian cryptocurrency investors are now in a state of complete uncertainty due to the current turn of events. It would be fascinating to observe how the RBI and the government work together to adopt a balanced stance.