Alex Dovbnya
RBI Governor Shakkanta Das remains very skeptical about cryptocurrencies
The Reserve Bank of India (RBI) has issued a stark warning regarding the use of Bitcoin and other digital currencies. Citing the FTX crash, RBI Governor Shakkanta Das stated that these unstable instruments “are nothing but gambling” and their perceived value is based solely on “appearance”.
At a Business Today event, Das repeatedly fired volleys against crypto, arguing that any asset or financial product must have an underlying value.
Similar to the tulip mania at the beginning of the last century, according to Das, cryptocurrencies have no real value. He specifically emphasized that crypto is “nothing but 100 percent speculation.”
That expressed concern about the increasing digitization of payments and the risk posed by tech giants dominating payment networks.
He also noted that if cryptos gain too much clout, since most cryptos are dollar-denominated, it could lead to a “dollarization” of the economy, a scenario he says is particularly dire given that many economies are heavily reliant on money control rely on their own currencies.
Consequently, he proposed banning cryptocurrencies outright rather than misclassifying them as a legitimate financial product.
As reported by U.Today, Das raised serious concerns about the potential impact of cryptocurrencies on Indian financial stability at the top of the crypto bubble in November 2021.
It remains to be seen what policy changes will follow in response to Das’s statement. Notwithstanding, an eventful period is ahead for the Indian cryptocurrency industry, which remains plagued by uncertainty.