T. Rabi Sankar, Deputy Governor of the Reserve Bank of India (RBI), has advocated for an outright ban on cryptocurrencies in India, branding them Ponzi schemes, according to Livemint. He also emphasized the importance of keeping cryptocurrencies out of the traditional financial system.
“Cryptocurrencies are not susceptible to the description as a money, asset, or commodity; they have no underlying cash flows, no intrinsic value; they are equivalent to Ponzi Schemes, and possibly worse,” Sankar stated at a Monday event.
Meanwhile, bargain hunters bought multiple cryptocurrencies at low prices, causing the entire crypto market to surge. . The market rose by 4.68 percent at $1.95 trillion.
The crypto trading volume too surged by 15.07 percent at $72 billion at 8.43 am, as per Coinmarketcap data.
Bitcoin, the world’s oldest cryptocurrency, saw its prices surge by 4.47 percent to $43,562.74.
The RBI chief last week delivered a stark warning against investing in cryptocurrencies, saying they lacked the underlying value of even a tulip – in a reference to a speculative bubble that gripped the Netherlands in the 17th century.
There are about 15 million to 20 million cryptocurrency investors in India, with total holdings of about ₹400 billion, as per industry estimates.
The RBI says the average holding continues to be small at only ₹1,566, which means that “wealth loss if it is a possibility, is likely to affect only a small fraction of these investors”.