Many G20 Members Have Sought Exploring Crypto Ban: RBI Governor

The Reserve Bank of India (RBI) Governor Shaktikanta Das on Saturday (February 25) said that many members of the G20 coalition have sought exploring the option of a complete ban on cryptocurrencies. 

“There were opinions expressed saying that the option of a ban or prohibition should also be considered,” Das was quoted as saying on the second and last day of the meeting of G20 finance ministers and central bank governors in Bengaluru.

The RBI Governor also said that the discussions revealed that there was a wider consensus among G20 countries revealed cryptocurrencies were a major risk to financial stability and monetary systems, alongside other cyber security issues.

Das’ statement came on the same day as India proposed a joint technical paper by the International Monetary Fund (IMF) and Financial Stability Board (FSB) that seeks to cover the macroeconomic and regulatory perspectives around cryptos.

As per the RBI Governor, this paper will build the groundwork for future debates on developing an international architecture on cryptocurrencies. However, Das added that this was a work in progress and it was too early to comment on how this project would shape up.

“In any case, ultimately, every country is a sovereign country. The countries will take their decisions. But once something is agreed in the G20, naturally it would be expected that countries would by and large follow whatever is the agreed position,” added the central bank’s Governor. 

India Pitches For Crypto Curbs

The comments came on the same day as Finance Minister Nirmala Sitharaman, while addressing the G20 meeting, said that there was ‘almost a clear understanding’ that anything issued by an entity other than the central bank was not a currency.

Chiming in, IMF Managing Director Kristalina Georgieva also told the delegates that banning private cryptocurrencies should be an option, while stressing the need for strong crypto regulations.

The IMF-FSB paper also called on the countries to establish a joint monitoring framework comprising of  different local domestic agencies, and pitched for an international collaborative arrangement to enforce crypto asset regulations.

India has been leveraging its G20 presidency to build a global consensus on regulating cryptocurrencies owing to concerns around money laundering and financing of terrorism by cryptocurrencies. 

Back home, India has left no stone unturned to tighten curbs around cryptocurrencies. On one hand, the centre has imposed a heavy taxation regime ranging from 1% TDS on cryptos to 30% tax on profits from digital currencies to dissuade users from investing in crypto. On the other hand, RBI officials have publicly panned cryptos, calling these virtual digital assets a threat to India’s financial stability.

The result has been plummeting crypto volumes in the country while the ongoing crackdown on multiple Indian crypto exchanges has also rendered a major blow to the industry. 

Despite this, governments across the globe have expressed confidence in the underlying blockchain technology as a mode to spur financial inclusion. With the challenges only expected to rise going forward, it remains to be seen how the space shapes up in the future.