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Crypto messaging: RBI vocal on 'banning cryptocurrency', investors need clarity from government

Manoj Kumar Rohilla | Updated on: 15 February 2022, 11:59 IST
cryptocurrency (Photo by Worldspectrum from Pexels)

The number of cryptocurrency investors in India has gone up manifold in the last 20 months. Most of the investors are small-time investors who have been enticed by advertisements promising a great future in crypto. Now, the Reserve Bank of India (RBI) has upped its opposition against crypto with its Deputy Governor T Rabi Sankar calling for a complete ban to save the financial system and maintain effective control over the economy.

We warned you about the risks

Suppose the government decides to finally ban the cryptocurrency, the investors won't have much to cry upon as the RBI has now started giving a clear message that 'ban on cryptocurrency' is the most advisable choice open to India'.

In the past, the RBI governor Shaktikanta Das asked investors to be cautious while investing in Cryptocurrencies. “I think it is my duty to tell investors that when they are investing in cryptocurrencies, they should keep in mind that they are investing at their own risk. They should keep in mind that these cryptocurrencies have no underlying (asset). Not even a tulip,” Das said during the MPC press meet.

Preparing the investors for the big shock?

Now the final call will be taken by the government. The finance minister Nirmala Sitharaman has now told a news conference that the Centre and RBI are working in harmony on many issues including crypto.

“With the RBI and the ministry not just on crypto but on every other thing as well, I think in the last few years you would have noticed that there is complete harmony with which we are working, respecting each other’s domains and also knowing what we have to do with each other’s priorities and in the interest of the nation. There is no turfing here,” the minister said, putting at rest speculation about a divergence of views on the issue of cryptocurrency.

Some experts believe that all this could be well-planned posturing to warn investors of the dangers and nudge them to exit before it is too late. This will further discourage new investors from embracing this highly volatile and risky investment option.

Crypto stand needs clarity

Finance Minister does talk about complete harmony but the final stand on crypto needs clarity. It doesn't reflect well on the government and the RBI that despite having "numerous negative implications", the final decision is being put on hold.

Investors hoping for a bounce-back
Investors who have lost more than 50 per cent of their investment worth in the last 12 months are hoping for a quick bounce-back. Exiting the market at a big loss makes very little sense to them. If the government decides to only regulate cryptocurrency, then investors who leave the market today will suffer a huge loss.

Many investors believe that government can't be blind to crypto and the technology that comes with it. So, a middle path could be found, but that again is a guess and present developments don't support this idea.

Still, the call on the ban is yet to be taken. The fact that the government is indulging in 'crypto- messaging' and avoiding clear messaging suggests it is going to be very difficult for all concerned.

Also Read: From rug pull to numerous scams: Infirmities of risk-prone cryptocurrency ecosystem

First published: 15 February 2022, 11:59 IST
Manoj Kumar Rohilla @maanojrohilla

Manoj has worked for nearly all forms of media--print, tv, radio and digital. During the last 24 years, he has worked for DNA India, DD, Zee TV, Nepal 1, Sahara Samay, IBN 7, India News, News Express and Daily Bhaskar. He loves making documentaries. As Deputy Editor he manages and heads news operations of Catch News, and Catch Hindi.