20 Jul 2022 Simon Briggs
Reserve Bank Of India Governor Call For Proper Regulations Or A Crypto Ban
The governor of the Reserve Bank of India (RBI), Shaktikanta Das, called the crypto sector a “real danger”, categorizing them to be a speculative tool with “a sophisticated name.”
“We must be mindful of the emerging risks on the horizon. Cryptocurrencies are a clear danger. Anything that derives value based on make believe, without any underlying, is just speculation under a sophisticated name”
To combat the possible risks with cryptos, the RBI is recommending a proper legislative framework to be created in order to limit the cryptocurrency industry.
India’s Finance minister wants a total crypto ban
India’s Finance Minister Nirmala Sitharaman has brought a warning to the Lok Sabha, the lower house of India’s bicameral Parliament, due to cryptos being a real danger to the international regulatory arbitrage. Sitharam added that cryptos should be regulated globally since crypto payments are borderless and decentralized.
Decentralization is among the key points of concern for Sitharam, as by being decentralized, most of the crypto projects operate outside of the traditional financial system, which makes the task of putting any kind of common rules extremely hard for regulators.
“The value of fiat currencies is anchored by monetary policy and their status as legal tender. However, the value of cryptocurrencies rests solely on the speculations and expectations of high returns that are not well anchored,” Sitharam added.
The crypto taxes act as a ban
The call for stricter regulations, or even banning cryptos in India, is the latest step of the RBI's battle with cryptocurrencies, as the bank has put up to 30% taxing on crypto-earned income in India.
In turn, the transactional volume of Binance in India dropped by more than 63% from the $14.5 million it was moving a day before the new cryptocurrency tax law came into effect on July 1. Furthermore, Indian exchanges like Vauld already suspended withdrawals, transactions, and deposits on their platform due to “financial difficulties.”
Despite the anti-crypto stance, the RBI is working on creating a CBDC project with an idea for a gradual implementation that will not disrupt the traditional financial system.
SEC vs Ripple battle continues
Meanwhile, Brad Sherman, a Democrat from California, stated that the Securities and Exchange Commission hasn’t investigated exchanges that traded XRP, despite leading a legal battle with XRP, calling it illegal security.
“The division has determined that XRP is a security and is going after XRP but, for reasons that I’ll bring up in questions, has not gone after the exchanges where tens of thousands of illegal securities transactions were occurring,” Sherman noted.
Sherman, who has been harshly dismissive of cryptocurrencies and has even advocated for a complete ban in 2018, now seems to be focused more on SEC’s actions towards Ripple, citing there is more work to be done.
However, Stuart Alderoty, the general counsel for Ripple, denied Sherman’s statements and declared them untrue because the lawsuit hasn’t been resolved in court.
“This is the pernicious effect of the SEC’s reg by enforcement approach – harming people, markets, and American innovation – with unproven allegations masquerading as regulation,” Alderoty noted.Cryptocurrency Regulations SEC cryptocurrency news crypto news SEC Security and Exchange Commission India Reserve Bank of India Regulations