Threat from the digital currency: RBI in favor of banning cryptocurrencies, said legal experts, should be done quickly

The Reserve Bank of India (RBI) is going back to its 8-year-old opinion. It is in favor of a complete ban on the trading of cryptocurrencies. However, legal experts believe that it should be done soon, as it has already been too late.

The threat was raised in 2013

RBI had issued a note on Christmas Eve in the year 2013. In this note, it had said that cryptocurrencies pose a risk to the financial, legal, and security of Indians. Four years later, in 2017, the world's first cryptocurrency, Bitcoin, was launched. Now after 8 years, the Reserve Bank is in favor of banning it.

Told the board, ban crypto

Earlier this month the RBI told its board that cryptocurrencies should be banned completely. In 2018, the central bank banned the trading of this digital currency in India and asked banks not to fulfill orders related to it. However, in 2020, the Supreme Court overruled this decision.

threat to financial stability

The Reserve Bank has consistently expressed concern over the threats to financial stability from crypto. The second concern is tracing its prices and transactions. Apart from this, there will also be a risk for countries like India to manage their foreign exchange, as this money can be withdrawn through digital currency. There will be no need to withdraw it in dollar terms.

IMF has also expressed concern

International Monetary Fund (IMF) chief economist Gita Gopinath has also expressed similar concerns. According to him, it will create big challenges for emerging and developed countries. Legal experts say that crypto should neither be accepted as a currency nor an asset.

The government still hasn't decided

The government is yet to decide anything in this matter. Although the bill was to come in the winter session of Parliament, that too was postponed for the next session. According to fintech companies, a section of the government is completely in favor of banning crypto. Legal advisors say that there is no question of considering crypto as legal currency. Crypto should be banned. However, it is already too late.

Government as a means of investment

The government wants to bring crypto as an investment tool and regulate it legally. Some are in favor of bringing cryptocurrencies as an asset under the Income Tax Rules and levying capital gains tax on it. Legal experts also say that the rule should be such that no one can take out the money earned from it without approval. However, the second problem is that India is a foreign exchange regulated market and therefore some decisions may not be taken like developed countries.