Banning cryptos is the most advisable choice: RBI deputy governor

economictimes.indiatimes.com:

Mumbai: The Reserve Bank of India (RBI) deputy governor T Rabi Sankar Monday said that banning private cryptocurrencies is the best option for the country, reiterating its tough stand on the asset class. Sankar, who was speaking at the IBA Banking Technology Awards, told bankers that even the notorious early-20th century Ponzi schemes were better as the Ponzi plans invested in income earning assets while cryptos are just gambling instruments. “They (cryptos) threaten the financial sovereignty of a country and make it susceptible to strategic manipulation by private corporations creating these currencies or governments that control them,” Sankar said. “All these factors lead to the conclusion that banning cryptocurrency is perhaps the most advisable choice open to India.”

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Sankar said that if allowed, private cryptocurrencies have the potential to wreck India’s currency, monetary authority, banking system, and the government’s ability to control the economy. “Cryptocurrencies are very much like a speculative or gambling contract working like a Ponzi scheme,” Sankar said. “It has been argued that the original scheme devised by Charles Ponzi in 1920 is better than cryptocurrencies from a social perspective. Even Ponzi schemes invest in income earning assets.” Sankar further said that since cryptocurrencies have specifically been developed to bypass the regulated financial system, it is reason enough to treat them with caution. “They (crypto) can (and if allowed most likely will) wreck the currency system, the monetary authority, the