India’s Central Bank Deputy Governor Calls for Crypto Ban

Central bank chatter continues to be crypto market negative. Government and regulatory scrutiny in India have also been on the rise. A number of governments and regulators, and even the IMF have called for a global crypto regulatory framework. The lack of a framework, however, has led to calls by some to impose blanket bans.

Calls for Bans on Cryptos and Crypto Mining Continue to Hit the News

Over the weekend, we had reported of Hungary’s central bank chief calling for a ban on crypto trading and mining. Central bank Governor Gyorgy Matolscy has not been alone, however. Increased regulatory scrutiny has tested support for Bitcoin (BTC) and the broader crypto market.

Bitcoin mining, in particular, has come under heightened scrutiny, with a number of nations imposing bans or considering such action.

Just last month, European Securities and Markets Authority (ESMA) vice chairman Erik Thedeen called for a ban on Proof-of-Work (PoW) mining. Theeden added that EU regulators should encourage more environmentally friendly Proof-of-Stake (PoS) mining due to its significantly lower energy profile.

India’s Crypto Regulatory Landscape

At the turn of the year, news of India’s regulators searching crypto exchanges on the suspicion of tax evasion raised the alarm bells of increased scrutiny. At Davos 2022, India Prime Minister Modi also talked crypto, asking for “global cooperation and a common approach towards addressing emerging challenges posed by cryptocurrencies”.

With the RBI, India’s central bank, also setting up a FINTEC division to keep up with cryptos, crypto scrutiny was likely to increase.

RBI Deputy Chief Calls for Crypto Ban

Just yesterday, news hit the wires of crypto market representatives meeting with India regulators to discuss crypto. On Friday, the crypto industry reportedly met with policy makers for the 1^st time since finance minister Nirmala Sitharaman’s tax policy announcement in early February. According to the report, representatives urged the government to reconsider its 30% crypto tax.

India and Thailand went their separate ways on crypto tax following the news of the 30% crypto tax. The Thailand government had previously announced a 15% tax only to reverse the decision.

For crypto exchanges and investors, the Friday meeting appears to have had a negative reaction from regulators. On Monday, RBI Deputy Governor Shir T Rabi Sankar called for a crypto ban. The Deputy Governor highlighted key issues that included crypto use to evade government controls and a threat to India’s banking and monetary system. Other issues noted included use to undermine KYC/AML and CFT regulations and a threat to India’s financial sovereignty with Dollarization.

There was little market reaction to news of the speech, however. A government-imposed ban currently seems unlikely following the news of a 30% crypto tax.