Reserve Bank of India (RBI) deputy governor, T. Rabi Sankar, described Satoshi Nakamoto as a “fictional person,” in comments that may appear to trivialize the enigmatic Bitcoin founder. Sankar went into a diatribe against crypto assets, calling them “worse” than a Ponzi scheme.
Speaking at a technology conference organized by the Indian Banks Association on Feb 14, the central bank official also proposed a complete ban on all private cryptocurrencies in the country, citing significant risks to financial stability.
The enigmatic Satoshi Nakamoto
Sankar admitted that Nakamoto was the “first” to effectively solve the problem of double-spending, an electronic money-related issue, but seemed to disparage the pseudonymous creator of Bitcoin.
He said Satoshi was “a fictional person or persons or corporate or any other entity, no one knows as yet.”
The identity of Satoshi Nakamoto is unknown. The inventor went off the radar on Dec 12, 2010, two years after publishing the Bitcoin white paper. Crypto and privacy lovers idolize Nakamoto as the epitome of libertarian values.
Just a Ponzi scheme, says Sankar
Identifying Satoshi as a fictional character reduces the founder’s seminal work to something of make-believe. But Sankar insisted that cryptocurrencies could not be defined as “a currency, asset or commodity.” Attempts to regulate them would be “futile,” he says, adding:
“They [cryptocurrencies] have no underlying cash flows, they have no intrinsic value…they are akin to Ponzi schemes, and may even be worse. All these factors lead to the conclusion that banning cryptocurrency is perhaps the most advisable choice open to India.”
The deputy governor noted that while Ponzi schemes invested in income-generating assets, digital currencies were just “gambling instruments.” He accused crypto assets of disrupting government-controlled monetary systems, exposing the country of 1.38 billion people to manipulation by the private issuers of digital currencies.
“The class of crypto products is fundamentally designed to bypass the established financial system, and on a larger scale government itself,” said Sankar.
“The fact that they are anonymous, decentralized systems that operate purely virtually makes cryptocurrencies particularly attractive to illegal, illegitimate transactions which have been largely filtered out of the formal financial system.”
Sankar scoffed at the idea that a crypto asset ban would stifle blockchain-related innovation. He said that was similar to believing that a ban on nuclear weapons would hinder development in nuclear physics. Sankar dismissed the argument that bitcoin (BTC) was a store of value or a medium of exchange, saying:
“We have examined the arguments proffered by those advocating that cryptocurrencies should be regulated and found that none of them stand up to basic scrutiny.”
India’s central bank governor Shaktikanta Das last week criticized digital assets as lacking “underlying value, not even a tulip.” He said they were “a threat to our macro-economic stability and financial stability.” While there appear to be inconsistencies over cryptocurrency policy between different government arms in India, the country’s finance minister insists there is “complete harmony.”
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