THE RESERVE BANK OF INDIA CLAIMS THERE’S NO BAN ON CRYPTOCURRENCY |
Posted: January 23, 2020 |
India is moving towards developing its own digital currency. The development process and the technology needed to create its own cryptocurrency, which is still in the initial stages. India plans on making investments into this digital asset. The cryptocurrency operates independently of the Central bank. The Reserve bank of India claims to not be able to ban the trade of cryptocurrency in India, yet has banned the banks from trading with these virtual currencies. Private cryptocurrency trading across the country according to the RBI was considered illegal. It also included a huge amount of fine if caught trading with cryptocurrency. The Reserve bank of India made it clear that it is only to be traded under the supervision of the government. Recently, the RBI claims to not be able to have the authority to make a ban on trades with the digital asset as it does not fall under the regulatory scope of the bank and does not have the power to ban cryptocurrency trade. But, it has been observed that banks in India have been prohibited from making any digital currency trade within its sections. The battle for the implementation of cryptocurrency in India has been evident in the past few weeks, between the Reserve bank of India and the Internet and Mobile Association of India (IMAI). Although the RBI claims to be powerless, it is still evident that it is stopping the trading of cryptocurrencies in banks. The trading of virtual currencies requires the banks to be connected. If the banks are banned or excluded from the trade, it would not be possible to engage in any cryptocurrency trade. As the fine is a big amount, banks do not want to risk going against the Parliament’s rule. The Reserve bank of India is not aware of the different types of cryptocurrencies available in the market. It also informed the Supreme Court of India that cryptocurrencies trade isn’t banned in India. But, the RBI stated that there are various concerned risks in this trade, so it has banned banks from associating in the trade due to risks like money laundering and cybersecurity. According to the Internet and Mobile Association of India, the power to regulate monetary policies does not grant the Reserve bank of India any decision making when it comes to stopping or excluding the trading for cryptocurrency. The power to implement any kind of ban on economical trading activity lies with the government’s legislative. Although, the concerns of the RBI against the legality of trading with cryptocurrencies in India are understandable and grants safe pointers. Due to the fact that cryptocurrency exchanges are vulnerable to any hackings, wherein a common man could lose his entire savings without having a backup plan. Considering the digital asset as a currency is dangerous and the RBI fears it could propose a threat to the sovereignty of India. In the Reserve bank of India’s opinion, if it’s not a currency. It couldn’t propose a threat. Mohit Kamboj is the author of this article. Find more information about Mohit Kamboj.
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