RBI Governor says Cryptocurrency is the same as Gambling

Reserve Bank of India Governor, Shaktikanta Das has claimed that cryptocurrency trading is a form of gambling, suggesting it should be banned in the country.

Giving his views on the matter, he said:

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

“Anything whose valuation is dependent entirely on make-believe is nothing but 100 per cent 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.”

While the central bank governor said blockchain technology needs to be supported, he said that cryptocurrency does not have value:

“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.”

He went on to say that the market price of cryptocurrencies is based on nothing but speculation and is similar to gambling.

However, Das maintained that cryptocurrency is not a financial product and added:

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

“Crypto will lead to dollarisation of the economy.

The governor also said that allowing cryptocurrency trade in the country would also undermine the authority of the central bank.

He said: “The Reserve Bank, being the monetary authority of the country as the central bank, will lose control over the money supply in the economy.”

He stated the central bank will also lose its ability to decide the monetary policy, liquidity and money supply level that needs to be maintained in the economy.

“It will undermine the authority of the RBI and lead to the dollarisation of the economy.

“These are not empty alarms or signals.

“A year ago, we said this whole thing (cryptocurrencies) is likely to collapse sooner than later and if you see the developments, I think I don’t need to add anything more.”

The RBI governor also spoke about the central bank’s role in steering the economy through difficult periods in world politics:

“We wanted the economy to have a safe landing in FY22, and the GDP to be above pre-pandemic levels.”

“The economy has not only landed safely but has remained resilient notwithstanding this huge amount of global spillovers.

“I think we have kept the objective of growth, which had to be given primacy during pandemic times and thereafter.

“We have not lost sight of the need to focus on inflation.”