RBI Governor Says Cryptocurrency Is Gambling With No Economic Value

Key Points:

• Shaktikanta Das, governor of the Reserve Bank of India, has reaffirmed his position asking for the prohibition of cryptocurrencies on the grounds that they are speculative and similar to gambling.
• Das claims that the RBI’s position on cryptocurrencies has not changed and should be viewed as gambling activities rather than as financial goods.
• The governor stated that despite calls to outlaw cryptocurrencies, the government must embrace blockchain technology because of its inherent advantages.

Shaktikanta Das, the governor of the Reserve Bank of India (RBI), spoke at the Business Today Banking and Economy Summit and reaffirmed his position calling for the outlawing of cryptocurrencies on the grounds that they are speculative and similar to gambling.

The governor of the RBI restated the position of the central bank on cryptocurrencies, saying they should be outlawed.

“RBI’s position on crypto is very clear – it should be banned,” he said.

According to Das, the RBI’s position on cryptocurrencies is unchanged, noting that they should be viewed like gambling activities rather than as financial products, India Today reported on January 13.

The governor of the central bank stated that cryptocurrency does not have any intrinsic worth but that blockchain technology should be pushed due to its many applications.

“Some people call cryptocurrency an asset, some call it a financial product, but every asset or financial product needs to have an underlying value. But cryptocurrency does not have any underlying value,” the RBI governor said.

Das claimed that the lack of underlying value in cryptocurrencies is what poses the greatest threat to the financial sector, and he cautioned that allowing digital assets to flourish will undermine the role of the bank in regulating the money supply.

He continued by claiming that the market price of cryptocurrencies is solely dependent on speculation and is, therefore, comparable to gambling.

“Anything whose valuation is dependent entirely on make-believe is nothing but 100 percent speculation, or to put it bluntly, it is gambling. In our country, we don’t allow gambling. If you want to allow gambling, treat it as gambling and lay down the rules,” Das said.

But Das insisted that cryptocurrencies are not financial products, adding:

“Cryptocurrency masquerading as a financial product or a financial asset is a completely misplaced argument.”

Private cryptocurrencies should be banned, RBI had said at one point, citing the possibility that digital assets could trigger the next financial crisis. The bank has recently published a concept note and is also pushing for the introduction of a central bank digital currency (CBDC).

It is important to note that India has argued in favor of a worldwide approach to cryptocurrency regulation, emphasizing the industry’s international nature.

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