The Indian government is worried that cryptocurrencies may destabilise the rupee

[eternalgloom]

It's pretty amazing to read news like this, it really shows that Bitcoin has had quite a bit of real-world impact since it was first launched.
I feel that we'd really need to see another financial crisis before people can appreciate it even more than now.

I do understand the worries of the Indian government. I wouldn't be too surprised of more and more people started to move their money into Bitcoin, as soon as there is only a hint of an upcoming crisis.
That could have the effect of actually increasing the inflation rate.

[1715103989]

1715103989

[cizatext]

Well the bank as the traditional financial institution will try everything within it power to push the government against bitcoin and at that will say the acceptance of bitcoin as a payment method in India will distarbilize the rupee, but that is not the truth and allowing free flows of bitcoin will further help the growth of the India economy in general.

[realcrypto]

The Indian Government do not have anything to worried about. Instead of thinking about cryptocurrencies, I will advice them to work on the economy of their country so that value can be added to their currency.

[kryptqnick]

I speculate that the Indian government might not be afraid that bitcoin may destabilize the rupee. It is the banks, which are the institutions that control the government, who might be afraid of bitcoin in competition versus their other secret operations. Money laundering.

Yeah, there have been too many scandals with money laundering performed by banks, that I honestly don't think they have the right to say anything in this regard when it comes to cryptocurrencies. As for India in particular, I think it should be worried more about underground economics that will definitely destabilize the rupee if they don't offer reasonable crypto regulations. I think they still have time to do that, though, as it's not lilke India is among the most known countries where people use cryptocurrencies, and even the total number of crypto users is barely able to disrupt any serious national economy for now.

[apilpirman.bisnis]

Indian government have banned bitcoin as transaction and investing for their people, they worried about many investor at their country will move their money in bank and invest with bitcoin or altcoin at the future.

[swetas0707]

I speculate that the Indian government might not be afraid that bitcoin may destabilize the rupee. It is the banks, which are the institutions that control the government, who might be afraid of bitcoin in competition versus their other secret operations. Money laundering.

https://en.m.wikipedia.org/wiki/Money_laundering#Notable_cases

http://images1.naharnet.com/images/67834/w460.jpg?1359632406

From money laundering to terror financing, the risks associated with cryptocurrencies are well known. But a high-level panel tasked with drafting rules for India’s virtual currency ecosystem is now obsessed with its impact on a less-explored area.

The committee, led by the top bureaucrat Subhash Chandra Garg is believed to be in a tangle over the impact that digital coins will have on the Indian rupee if they are allowed for making payments.

“If bitcoin and other digital currencies are going to be allowed to be used for payments then whether it will end up destabilising the fiat currency is a major concern for them (the Garg panel),” said one of the representatives from the cryptocurrency ecosystem who recently met the ministers, requesting anonymity. “The overall impact on the financial ecosystem that it is likely to have is still unclear and it has been a challenge to convince them on this particular point."

Read in full https://qz.com/india/1539944/india-fears-that-bitcoin-other-cryptocurrencies-may-hurt-rupee/

One more concern of the government which has not covered in this article that the loss of taxes in case of transaction is done in bitcoin or any other crypto currency. Indian government is now very much concern for collection of taxes.
Moreover so many Ponzi schemes are associated with this. When people are trapped, they complaint to the government (by FIR) etc and media make questions to the government officials. Government more concerns about safety of common man money as so many money laundering cases appeared in the past.

[Upgrade00]

Regulation appears to be the way to go for nations like these who recognize the potential in cryptocurrency as well as the threats it poses to their native fiat currency. Some choose rather to outrightly ban it and make it illegal in their country.

[magneto]

I speculate that the Indian government might not be afraid that bitcoin may destabilize the rupee. It is the banks, which are the institutions that control the government, who might be afraid of bitcoin in competition versus their other secret operations. Money laundering.

https://en.m.wikipedia.org/wiki/Money_laundering#Notable_cases



From money laundering to terror financing, the risks associated with cryptocurrencies are well known. But a high-level panel tasked with drafting rules for India’s virtual currency ecosystem is now obsessed with its impact on a less-explored area.

The committee, led by the top bureaucrat Subhash Chandra Garg is believed to be in a tangle over the impact that digital coins will have on the Indian rupee if they are allowed for making payments.

“If bitcoin and other digital currencies are going to be allowed to be used for payments then whether it will end up destabilising the fiat currency is a major concern for them (the Garg panel),” said one of the representatives from the cryptocurrency ecosystem who recently met the ministers, requesting anonymity. “The overall impact on the financial ecosystem that it is likely to have is still unclear and it has been a challenge to convince them on this particular point."

Read in full https://qz.com/india/1539944/india-fears-that-bitcoin-other-cryptocurrencies-may-hurt-rupee/

That's as dumb as saying that gold may destabilise the dollar. It simply doesn't make any sense.

We all know that the Indian government has been extremely negative in terms of crypto and bitcoin policy, and as a result have essentially tried to restrict all access from inside their country to crypto exchanges and businesses. Has this all along been a concern for the stability of Indian's rupees? I don't think so.

There are probably other reasons why they are trying to restrict access to bitcoin to such an extent. Preventing capital flight could be one minor one. Competition with banks is another thing, but I wouldn't say that it's in terms of competition for money laundering. But destabilising the rupee with bitcoin only having a fraction of the market cap that gold has? That's absurd.

[hulla]

I totally agreed with the OP specualation because the fear of destabilize of national currency, spoiling and leaking the profit/secret of the senior bankers was the main reason why bitcoin was not accepted in some countries. Besides, the seniors were among those that make senior regulator to intervene in crypto market and if you check closely most of those countries that accept bitcoin are country with corrupt leader.

Note : - the indian bankers have already showed that they dont like bitcoin right from the beginning.

[kingpin4321]

The US government has also had the same thought that cryptocurrency would destabilize the US dollar and some other nation also had shared the same skepticism. But cryptocurrency is not just like any other currency it's based on a different platform the blockchain technology

[bajingluncat]

Crypto currencies and banks are indeed difficult to walk side by side, especially regarding fiat currencies, competition will always occur and sometimes there will be things that overlap each other, the role of government here is indeed needed to mediate and find a way out even though it has to issue regulations, that's okay, as long as no one is harmed, for now crypto currency users already already feel it is very unwise if the government will ban it and it would be far better for the government to support by giving a forum or regulation that can minimize the negative impact of crypto itself, and I think that must be done by the government of india, standing as a mediator and protector