India’s Central Bank Is Keen to Ban Cryptocurrencies, Says Finance Minister

Bhushan Akolkar
July 18, 2022
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India has been doing flip-flops over the last few years over its decision to allow the use of cryptocurrencies in the country. On Monday, Indian Finance Nirmala Sitharaman said that the Indian central bank – Reserve Bank of India (RBI) – is keen to ban the use of cryptocurrencies in the country.

Her fresh comments while addressing parliament members shows the growing uncertainty surrounding digital assets. The Indian finance minister said that RBI has expressed concerns about the “destabilizing effect of cryptocurrencies on the monetary and fiscal stability of a country”.

While speaking about having legislation in this sector, Sitharaman added that “RBI is of the view that cryptocurrencies should be prohibited”. However, Sitharam said that introducing any legislation for regulatory purposes or deciding to ban them would require significant international cooperation. As per the draft, the Indian Finance Minister said:

“Cryptocurrencies are by definition borderless and require international collaboration to prevent regulatory arbitrage. Therefore any legislation for regulation or for banning can be effective only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards”.

India’s Crypto Crackdown

Earlier this year, India introduced a strong 30% tax on the profits derived from crypto trading. The reason behind imposing this heavy tax was to discourage investors. The tax rules did have an impact as trading volumes went dry at crypto exchanges over the last few months.

On the other hand, banks have called off ties with major crypto exchanges. This has put a big dent in the Indian liquidity coming to the crypto market. Cryptop exchange Coinbase had to stop its services in India due to informal pressure from the RBI.

The recent turn of events has left Indian crypto investors in an absolute uncertain zone. It will be interesting to see how the government and the RBI coordinates to take a balanced approach.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.