RBI governor Shaktikanta Das has described cryptocurrencies as “a clear danger.”
Not stoked about crypto: India’s central bank has been voicing its concern about cryptocurrencies for years.
In 2018, the RBI had barred entities regulated by it from dealing in such instruments.
The Supreme Court, however, struck down the ban about two years later.
Earlier this year, Das called cryptocurrencies a "threat to macroeconomic and financial stability", just over a week after the budget presentation.
Budget 2022-23 proposed 30 per cent tax on gains made from cryptocurrency trades.
From today, a of 1 per cent on all digital-asset transfers above a certain size takes effect.
Financial Stability Report: The RBI governor penned the foreword to the 25th issue of the report, released on 30 June.
Das brought attention to cyber risks in an increasingly digitalised world.
“Cryptocurrencies are a clear danger. Anything that derives value based on make believe, without any underlying, is just speculation under a sophisticated name,” he said.
Acknowledging the potential and impact of technology in expanding financial reach, Das said the technology’s ability to disrupt financial stability must be guarded against.
Das has often voiced concerns about investing in cryptocurrencies. He has said it is his “duty” to do so.
Not doing too well: Cryptocurrencies have witnessed massive volatility amid global uncertainties recently.
Cryptocurrencies are seen as a highly speculative asset.
“...many will have invested in cryptocurrencies because they believed it would make them richer. This belief has no doubt been shaken,” researchers around mid-May in The Conversation, after the crypto crash.
“The global cryptocurrency market cap has fallen by over $2 trillion after touching the $3 trillion mark in November last year,” a Financial Express noted.
“We have been cautioning against crypto and look at what has happened to the crypto market now. Had we been regulating it already, then people would have raised questions about what happened to regulations," Das told CNBC-TV18 in an interview.
What’s next: The government is working on a consultation paper on cryptocurrencies after speaking to various stakeholders and institutions like the World Bank and IMF.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.