The Reserve Bank of India has justified its crypto banking ban to an industry group which has been trying to convince the central bank to ease crypto restrictions. In response, the central bank outlines key areas of concern and upholds its stance on crypto.
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RBI’s Main Concerns
India’s central bank, the Reserve Bank of India (RBI), has divulged key areas of concern regarding cryptocurrency. The communication is in response to a representation submitted by the Internet and Mobile Association of India (IAMAI). The document was sent to the central bank during the Supreme Court hearing of IAMAI’s petition against the crypto banking ban.
While RBI’s response cannot be made public, some industry participants have seen it and have discussed its content.
A source who has seen the document told news.Bitcoin.com that RBI told IAMAI it is particularly concerned about investor protection, cryptocurrencies’ lack of intrinsic value, and their anonymity, which could lead to money laundering.
Investor Protection
Sohail Merchant, CEO of crypto exchange Pocketbits, commented on RBI’s response, stating that “all the basis of their arguments is ‘Investor Protection’.”
Nischal Shetty, CEO of crypto exchange Wazirx, concurred. “Some of the arguments seem to be around investor protection,” he noted, adding that “but investor protection comes with regulation and not a ban!”
Other crypto exchanges also agree that a ban is not the way to protect investors. Praveen Kumar, CEO of crypto exchange Belfrics, was quoted by Quartz:
By limiting transactions via bank accounts and allowing more cash-related transactions, RBI is allowing more people to get duped…Instead, they need to regulate the exchanges and lay down guidelines that can help prevent these frauds.
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