India’s Reserve Bank Justifies Cryptocurrency Ban
Recently, the RBI responded to a request by the IAMAI to present their case after implementing the ban. The bank then explained the reasons and key aspects behind its regulation enforcement and revealed certain concerning details in digital currencies.
The request filed by the IAMAI was sent to the central bank during the association’s hearing at the Supreme Court regarding the cryptocurrency ban. Although the central bank cannot divulge any information about its response, a few attending individuals have spoken about the response after it was made.
According to a report by a witness, the bank has expressed its concerns to the association regarding the anonymous nature of digital currencies which plays a huge factor in money laundering schemes as well as protection for investors and more. Pocketbits’ head executive, Nischal Shetty, spoke about the banks reply to the IAMAI, stating that the entire attempted justification of their response revolved around Investor Protection.
Other statements included one from the President of Wazirx, explaining that investor protection should be properly inspected and regulated accordingly as opposed to completely banning cryptocurrencies and everything involved. Many digital exchanges have voiced their opposition to the ban, agreeing that it was not a way to truly provide investors with asset protection.
Praveen Kumar explained that by restricting crypto transactions through banks, financial institutes are exposing individuals to more fraud as opposed to reducing it. The CEO further explains that cryptocurrency exchanges should instead apply the proper regulations and provide thorough rules to better protect customers and clients.
As concerns rise alongside the rate of cryptocurrency related crimes within India, officials have been zoning even on the technology and its criminals by introducing new anti-crime teams and many leading industry figures have been accused of corruption and crimes related to digital currencies.
Apart from digital crime, the Ministry of Finance made statements in 2017 regarding cryptocurrency investments and issuing caution while comparing them to business scams. They also commented on the volatile nature of cryptocurrencies, stating that they were risky due to not possessing an essential value, allowing their price to rise and drop in a moment’s notice.
Another important issue regarding the ban is the anonymous nature of digital currencies although trading platforms state that by regulating and enforcing KYC procedures, this will eliminate any threat of money laundering.