Shaktikanta Das, the head of India’s central bank, has criticised digital tokens, marking the latest denouncement of cryptocurrencies from officials in the country.
“Changes in the value of any so-called product are a function of the market. But our main concern with crypto, unlike any other asset or product, is that it has no underlying basis. I think crypto or private cryptocurrency is too hard to describe. A fashionable way of doing what is otherwise 100% speculative activity” said Das.
According to Das, crypto was inspired by the idea of bypassing or breaking the existing financial system. “They don’t believe in a central bank, they don’t believe in a regulated financial world. I have yet to hear a good argument about what public purpose it serves”, he said, arguing that crypto should be banned.
India is one of the nations that has taken a stringent approach to handling cryptocurrencies. Earlier this year, it began taxing virtual currencies, levying a 30% tax on gains and a 1% deduction on each crypto transaction.
Delhi’s move, alongside the market downturn, has severely depleted the number of transactions processed in India by the local exchanges CoinSwitch Kuber, backed by Sequoia India and Andreessen Horowitz, and CoinDCX, backed by Pantera.