Shaktikanta Das, the governor of the Reserve Bank of India, has dropped yet another bombshell on the prospects of cryptocurrencies for the country.
In a post-monetary policy briefing, Mr. Das referred to cryptocurrencies as a hazard to both macroeconomic and financial stability, additionally warning investors to invest at their own discretion.
#RBIPolicy | #Cryptocurrencies are a big threat to macroeconomic and financial stability, reiterates #RBI Governor @DasShaktikanta as he warns #crypto investors of risks@RBI #CryptoNews #Cryptos pic.twitter.com/oUs9uEWe1D
— ET NOW (@ETNOWlive) February 10, 2022
Mr. Das, the Governor of the Reserve Bank of India, has always been wary of mainstreaming crypto. The central bank is concerned about capital limitations on cryptocurrencies because they can be created by anybody, wherever. Additionally, a concern of the government is also financing terrorism and money laundering that come with the utilization of cryptocurrencies.
The risk cryptocurrencies constitute to financial stability according to Mr. Das is that cryptocurrencies fundamentally have no intrinsic value. He went on to say “as far as cryptocurrencies are concerned, the RBI had made its stance very clear. Cryptocurrency is privately created & it is a threat to our financial and macroeconomic stability.”
Additionally, Mr. Das warned that “investors in cryptocurrency should keep in mind that they are investing at their own risk. The cryptocurrency has no underlying, not even a tulip.”
In the process of speaking against cryptocurrencies, Mr. Das implied that the launch of the RBI Digital Rupee (CBDC) is something to look forward to by stating that “RBI Digital Rupee will be launched in the year 2022-23. We can’t predict a timeline for its release yet. There’ll be no difference between Digital Rupee & the normal rupee.”
T Rabi Sankar, RBI Deputy Governor, elaborated on the CBDC, saying that the digital rupee will be precisely like a conventional paper rupee except it will be in a digital form: “digital rupee will be same like you keep rupee in your pocket or purse, you can keep digital rupee at you device like mobile. Digital rupee or normal paper rupee will have no difference and will be issued by RBI. Banknote or rupee note has a liability of RBI, cryptocurrency is a privately created currency.”
Governor Das’s remarks on the matter follow the new measures that the Indian government took the first measures to acknowledge cryptocurrency trade a few days prior. Finance Minister Nirmala Sitharaman declared a 30% tax on crypto trading proceeds in her Union Budget speech earlier this month.