Cryptocurrencies worse than Ponzi schemes, banning them advisable: RBI Deputy Governor
India Today
RBI Deputy Governor T Rabi Sankar has said that banning cryptocurrencies is the most advisable choice for India as they are akin to Ponzi schemes and "may even be worse".
Reserve Bank of India (RBI) Deputy Governor T Rabi Sankar on Monday said that banning cryptocurrencies is the most advisable choice for India as they are akin to Ponzi schemes and "may even be worse".
Addressing an Indian Banks Association event, Rabi Sankar said, "We have seen that crypto-technology is underpinned by a philosophy to evade government controls. Cryptocurrencies have specifically been developed to bypass the regulated financial system. These should be reasons enough to treat them with caution. We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi Schemes, and may even be worse."
"Banning cryptocurrency is perhaps the most advisable choice open to India and there are strong reasons to keep cryptocurrencies away from the formal financial system," he added.
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Rabi Sankar said that cryptocurrencies can wreck the currency system, the monetary authority, the banking system, and in general, the government’s ability to control the economy.
Rabi Sankar added that while Ponzi schemes invested in income earning assets, cryptos are just "gambling instruments".
Rabi Sankar’s statement comes after RBI Governor Shaktikanta Das expressed concerns over cryptocurrencies. Das had said that these instruments could be harmful to macroeconomic stability.
