By CCN Markets: India’s largest bank, the State Bank of India (SBI), has announced an initiative yesterday in which the state-owned financial institution seeks to eliminate debit cards to promote digital transactions. In light of the SBI’s ambitious project, it has now become clearer that India’s last month plans to ban all crypto assets is total nonsense.
Despite the massive reliance on debit cards by the bank’s customers, SBI chairman Rajnish Kumar the financial institution’s plans to get rid of them during the annual Fibac conference yesterday.
In an attempt to digitize payments, Kumar wants to replace credit and debit cards – that 930 million individuals are using in the country – with the SBI’s Yono platform that allows withdrawals at cashpoints as well as cardless payments.
So, India seeks to make payments more digital by cash withdrawals and cardless payments, which I wouldn’t call progress. But what makes the least sense in the story that the nation’s government wants to ban crypto despite the state-owned bank’s radical digitization initiative.
CCN reported last month that India’s digital currency and blockchain inter-ministerial committee had published a 200-page report pushing for the ban of all cryptocurrencies.
The proposed legislation – which – would make it illegal for Indian citizens to buy, hold, send, or receive digital currencies.
According to Alex Mashinsky, the CEO and the founder of the crypto company Celsius Network, India seeks to boost its tax collection and regulate its black and gray market-riddled economy more efficiently by digitizing payments.
He told CCN:
“The reason India chose to make crypto illegal is that while they do want to go digital, they also want to avoid the flight of capital that crypto enables. This is why they chose similarly to China, to create digital currencies but avoid using crypto. In this way, they get to control their currency issuance, collect taxes on all digital activity and protect against capital leaving the country.”
So, the Indian government wants to get rid of bitcoin to maintain its power over the country’s newly digitized economy while not caring about the financial freedom of its citizens.
“Unfortunately, many countries are more interested in maintaining their power and influence instead of acting in the best interests of their citizens,” Mashinsky added.
Supporting Mashinsky’s argument, the CEO of the fintech firm Everex, Alexi Lane, believes changes, like banning crypto and eliminating credit cards, shouldn’t be imposed radically as they could have an opposite effect on India.
“I believe rather cryptocurrency market regulation and sandbox environment for fintech and blockchain entrepreneurs would bring more innovation and tax revenues to a country rich with so many talents, like India,” Lane told CCN.