Banning cryptocurrency is perhaps the most advisable choice open to India, said RBI Deputy Governor T Rabi Sankar adding they have examined the arguments proffered by those advocating that cryptocurrencies should be regulated and found that none of them stands up to basic scrutiny.

These should be reason enough to keep them away from the formal financial system. Additionally, they undermine financial integrity, especially the KYC regime & AML/CFT regulations & at least potentially facilitate anti-social activities, Sankar said.

We have also seen that cryptocurrencies are not amenable to definition as a currency, asset, or commodity, they have no underlying cash flows, they have no intrinsic value that they are akin to ponzi schemes, and may even be worse, he mentioned.

We have seen that crypto-technology is underpinned by a philosophy to evade government controls. Cryptocurrencies have specifically been developed to bypass the regulated financial system. These should be reason enough to treat them with caution, Sankar said.

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