New Delhi: Deputy Governor of the Bank of India (RBI) Randhi on Tuesday made the case to treat and manage Crypto as a separate asset class with views to enable the government throughout the world to effectively deal with illegal activities related to virtual currencies.
After quite a lot of debate over the years, he said, people have fully understood that Crypto could not be a currency because of the fundamental element of a currency – that it must be this legal tender.
CryptocurrencyLive Previous Nexthe said that in this case, a person cannot force the crypto currency to be accepted by others because it is not a legal tender.
The general consensus among many policy makers is that it must be considered an asset, not as a currency, not as a payment instrument and not as a financial instrument because there are no emitents that are clearly identified, he said.
“So, once we have an understanding and acceptance, that it is an asset (not a currency), it becomes relatively easier to have the surrounding regulations,” he said on a virtual event organized by the internet and the Indian cellular association (Iaamai)) and Blockchain & Crypto Asset Board (BACC).
He expressed concern that there was a possibility of using this virtual asset for criminal activities in the absence of regulations and there were many examples showing it.
So, he said, any jurisdiction must have a clear framework where every part of economic activities should not be considered to support criminal activities.
“So that’s where real difficulties come in vis-à-vis assets of Crypto because there is a possibility, and not really a possibility, there is little evidence of anecdotal that crypto assets have been used for increasingly, or on a large scale, for illegal activities such as a ransom etc., “he said.
He said that the base of Crypto about 12 years returned as an asset was that it could not be traced and taxed.
“So the Crypto idea is that it must be anonymous, independent, and cannot be taxed or traced, as I said that every society will have its own rules, who expect compliance by all its members and punish non-compliance,” he said.
Last month, Finance Minister Nirmala Sitharaman had said the law proposed about Cryptocurrency was waiting before the Union cabinet.
The inter-minister’s panel about Cryptocurrency, under the leadership of Secretary (economic affairs) to study the problems related to the virtual currency and propose specific actions, have submitted their reports.
Recommend that all personal cryptocurrency, except for every virtual currency issued by the state, must be banned in India.
Meanwhile, the RBI has worries on the Cryptocurrency traded on the market and has conveyed the same thing to the government.
Underlining that the government and RBI “committed to financial stability”, the Governor of RBI Shaktikanta DAS said there was no difference between the central bank and the Ministry of Finance in this matter, and “we must now wait for the final decision about this problem” from the center.
DAS said he had “reasons to believe” that the government agreed with the “main concern” marked by the RBI about Cryptocurrency.