- RBI Governor Shaktikanta Das highly disapproves the value of cryptocurrencies
- With privately-owned digital money, Das said this could bring a new financial fallout
- India is now tightening its regulations regarding cryptocurrency
Shaktikanta Das, governor of the Reserve Bank of India (RBI), was frank in discussing the cryptocurrency business at a conference in December. He predicted “private” cryptocurrencies would bring on the subsequent economic collapse.
Das presented his argument on December 21 at the Business Standard BFSI Insight Summit. He said private cryptocurrencies – assets without the government or bank’s permission- pose a significant danger to the economy. Without issuance, he concluded that crypto has no real value other than speculation.
Underneath the surface, according to Das, they are worthless. “They have huge inherent risks for our macroeconomic and financial stability.” He added that digital currency holds no public purpose.
A comprehensive ban on cryptocurrencies in India was then proposed, with Das lending his voice to the growing chorus in favor of such a move by the Indian government:
“It [private cryptocurrency trade] is a hundred percent speculative activity, and I would still hold the view that it should be prohibited.”
RBI Does Not Want Another FTX Incident
Governor Das also brought up the irresponsibility of former FTX CEO Sam Bankman-Fried and the recent implosion of the FTX market. He pointed out this incident as one of the prime examples of an economic downfall that may tamper with the livelihood of everyone.
After reviewing the last year’s events, including the most recent episode with FTX, he concluded that there’s nothing further to elaborate regarding the consecutive misfortunes in the crypto sector.
These comments are yet another example of a well-known politician or financier blaming the cryptocurrency industry for the failure of FTX. Meanwhile, US lawmakers have been using the crypto winter and the closure of firms to voice their disapproval of digital assets and that a central bank digital currency (CBDC) is better for citizens.
A central bank supporter, Das agreed that a CBDC makes more sense. He underscored the RBI’s ongoing efforts to launch the digital rupee.
His opinion sparked mixed feedback among anti-crypto Indian citizens and pro-crypto Indian supporters.
He also elaborated that the upcoming century will usher in a new era of digital currencies with the support of central banks and the regulation of governments. Das said, “India has been at the forefront of the digital revolution in the current century.”
Ever since the emergence of Bitcoin, the Reserve Bank of India has looked down on cryptocurrencies and often cast doubt on their value.
The RBI governor suggested that the current situation of the people and businesses’ awareness of cryptocurrency will bring more problems. Since June of this year, the RBI has ranked the crypto sector as the highest risk in finance.
Other Countries in Favor of CBDC
The United States, China, and Pakistan are among the many countries where the government wants to implement a more systemized and monitored digital currency for the people. The CBDC allows central banks and states to track transactions and determine whether these payments are legitimate.
India was one of the first countries to tighten measures regarding cryptocurrencies, specifically by increasing taxes on crypto trades. Today, the nation holds one of the strictest regulations against crypto.
While the phrase “Not your keys, not your coins” sounds like an excellent idea for cryptocurrency supporters, Shaktikanta Das sees this as a threat to the economy and fiat currency.