Comparing cryptocurrency to a “Ponzi scheme,” a top official of India’s central bank, Reserve Bank of India (RBI), has urged a ban on the crypto coins, Indian media reported.
T. Rabi Sankar, deputy governor of the Reserve Bank of India, was quoted at a banking conference saying cryptocurrencies have been "specifically developed to bypass the regulated financial system," and are not backed by any underlying cash flow.
"We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi schemes, and may even be worse," he added.
Sankar added that: "Banning cryptocurrency is perhaps the most advisable choice open to India and there are strong reasons to keep cryptocurrencies away from the formal financial system."
What's considered as RBI's sharpest criticism comes just weeks after the Indian government proposed 30% tax on crypto and NFTs income and paved way to recognize it as legal tender in the world’s second-largest internet market.
It's worth noting that there's a proposed bill that calls for banning most cryptocurrencies in the country. In addition, the bill seeks to create a facilitating framework for the creation of an official digital currency to be issued by the Reserve Bank of India.
