Police Authorities Reiterate Reserve Bank of India’s Advisory Against Crypto Asset Investing
The past few months have been rather challenging for the entire crypto industry, in India though, things have been complicated.
The government of the country with the second largest population had made it clear that they did not consider cryptos as an asset. Subsequently, however, the government asked for suggestions and had a team set up to explore the possibilities.
The report has been submitted but has yet to be made public. In this climate the Director General of the north Indian state of Jammu and Kashmir [J&K], Shesh Paul Vaid has issued instructions warning the public against investing in Crypto-currencies at this time.
What was said
According to reports from the Business Standard, quoting the branch’s inspector general, it was stated:
“The general public is informed not to make any type of investment in cryptocurrencies, virtual currencies such as Bitcoin because there is a real and heightened risk associated with them.”
The warning has been issued after the crash of the markets at the end of last year. It went on to discuss further, the possibilities of a:
“sudden and prolonged crash, exposing investors; especially retail consumers who stand to lose their hard-earned money.”
Why was it said
There are no clear indications why such an advisory was issued, along with a reminder that crypto assets are not sanctioned by the government.
India has repeatedly looked at crypto-currencies as a risky investment since the nations finance minister questioned it legitimacy. At the end of last year, the nations central bank, the RBI, had issued a circular that effectively banned banks from allowing blockchain-related operations. This was defended by a Ministry of Finance spokesman, Pon Radhakrishnan, who pointed out that the governments risk averse approach is based off the global lack of consensus on the issue.
Though it was considering a central bank digital currency (CBDC), the idea has now been put in the back burners, as per the latest reports. To add to the negativeness, the inquiry committee that was looking into this has not made its recommendations available.
News sources have quoted an unidentified source as saying, “The government doesn’t want the digital currency any more. It thinks it is too early to even think about a digital currency.”
While the current crypto market is far from ideal, it seems a little strange that it has been singled out even as the general markets are experiencing a downturn.