RBI Admits It Did No Research on Cryptocurrencies Before Banning Them
Back in school, we likely had days where we just weren’t in the mood for research or homework, and whipped up a paper last minute. Apparently, the RBI — India’s central bank — was in that same kind of mood the day it decided to ban cryptocurrencies.
Subscribe to the Bitsonline YouTube channel for more great interviews featuring industry insiders & experts
Lazy Is as Lazy Does
Legal experts in India allege that the RBI did no research on cryptocurrencies when it decided to implement rules that prevented banks and financial institutions from conducting business with crypto-related enterprises.
New Delhi lawyer Varun Sethi received RBI’s Right to Information (RTI) application the day it was filed, and says several questions regarding why the ban was necessary were asked. They included:
“Was it the findings of a research paper?”
“Was it the decision of an RBI-backed panel?”
“Is India’s central bank-consulted laws or research being followed by other countries?”
Sethi affirms that the institution answered “no” to each question, and he now calls the ban “arbitrary” and pointless.
“It seems as if the ban came into effect without any thought from the RBI. It has either answered in the negative, or given conflicting answers to our questions asking what led to this ban.”
The RBI Angers a Lot of People
Naturally, cryptocurrency exchanges throughout India are displeased with the news. Many are calling the RBI’s decision “hasty,” and say that the lack of clear regulation is “unfair.”
“They came out with this ban, which has monumental consequences, without doing any significant research, and so it seems like a completely superficial decision,” says Nischal Shetty, founder and CEO of Indian trading platform WazirX.
“There are other countries who are not comfortable with such currencies, but not [all] of them have banned them. Instead, countries like the U.S., France, Germany, etc. have gone back to the drawing board and are trying to understand the dynamics.”
Could the Ban Be Reversed?
The RBI’s lazy decision-making has now opened the door for potential court action. A government panel now insists that a ban on cryptocurrencies is the wrong decision for India, and is mulling “cryptocurrency with riders” as a means to keep all parties happy.
In addition, Sethi is pursuing further information from the RBI regarding their answers, and says he will take the case to India’s Supreme Court if they are unwilling to cooperate or if additional information proves useless:
“I can explain to the court that my public interest litigation is a last resort, and despite several attempts, the RBI failed to provide any satisfactory answers.”
Sound off below. Was the RBI wrong to implement the ban under such circumstances?
Images via Pixabay