The Reserve Bank of India (RBI) Governor Shaktikanta Das reiterated his caution against crypto assets in the Indian economy. The governor said if crypto is allowed in India, RBI will lose control over monitoring transactions.
The governor said that it does nOt have any underlying assets. Crypto masquerading as a financial asset is a completely misplaced argument. He further added that any assets without an underlying, whose valuation is dependent on belief, is nothing but 100 percent speculation.
The governor said, “The so-called crypto assets have the potential to become a means of exchange. If you allow it to grow, assuming 20% of transactions in the economy through crypto, which is not issued by the central bank, the RBI being the monetary authority will lose control over the money supply in the economy.”
In 2013, RBI issued a circular where it warned traders against the use of virtual currencies. It asked traders to stay away from cryptocurrency trading and warned about the risks associated with it. Later in 2017, RBI and the finance ministry issued a warning that virtual currencies are not legal tender.
The regulator has constantly informed about the risks concerning trading and also thought of introducing a blanket ban on them in 2018. In May 2022, when RBI announced its intent to launch an official digital currency, the Governor said cryptocurrencies pose a serious threat to any financial system as they are not under its regulation.
