The head of India’s central bank, the Reserve Bank of India (RBI), has warned of significant risks associated with cryptocurrencies, particularly for emerging market economies. “It can impact your financial stability, currency stability, and monetary system,” RBI Governor Shaktikanta Das said.
RBI Governor’s Crypto Warnings
Shaktikanta Das, the governor of India’s central bank, the Reserve Bank of India (RBI), issued several warnings regarding cryptocurrency at the World Economic Forum in Davos this week. Das said:
Cryptocurrencies have huge risk, particularly for emerging market economies because it can impact your financial stability, currency stability, and monetary system.
“There is no underlying. It is not a currency, but it has the potential to become a currency in which event it can occupy the part of the payments system. It can impact your banking system and therefore it has very much risk involved in it,” the Indian central bank governor stressed.
Commenting on the approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC), Das said: “While others might see a renewed cryptocurrency party, we see significant risks.” He noted that the U.S. SEC is responsible for “their nation’s well-being, and we for ours.” The RBI governor additionally stated: “Some celebrate this as a new party, but they forget the crash a few years ago. Volatility, money laundering, and terror financing risks are inherent in these assets.”
The Indian central bank chief further opined:
Cryptocurrency is highly speculative and country like India should be very careful.
Das has long been a vocal critic of bitcoin and cryptocurrency. In January last year, he reiterated his strong recommendations for a complete ban on cryptocurrencies in India. “Cryptocurrency masquerading as a financial product or a financial asset is a completely misplaced argument,” he stressed. “The Reserve Bank, being the monetary authority of the country as the central bank, will lose control over the money supply in the economy … It will undermine the authority of the RBI and lead to the dollarisation of the economy.”
