Reserve Bank of India’s (RBI) Governor Shaktikanta Das on Monday has reaffirmed his negative stance on crypto. RBI had always raised concerns that cryptos will undermine the monetary, financial, and macroeconomic stability of India. In fact, investors and the government had been warned against cryptocurrencies, which have now crashed immensely.
In addition, RBI Governor hints at announcing an interest rate hike in the next monetary policy meetings in June.
In an interview with CNBC-TV18 on May 23, RBI Governor Shaktikanta Das said investors were warned against volatility in the crypto market, which has now made several investors lose money.
“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.”
Furthermore, he thinks regulating cryptocurrencies is a difficult task as they have no underlying value. Recently, Indian Finance Minister Nirmala Sithraman also made a strong case for regulating cryptocurrencies at a global level to mitigate risks such as money laundering and terror financing.
The Indian government and RBI seem to agree over cryptocurrencies hold no underlying value. The concerns of RBI and the Indian government are rising amid increasing crypto adoption in India.
“We have conveyed our position to the government and they will take a considered call. I think the utterances and statements coming out from the government are more or less in sync.”
Meanwhile, Deputy Governor T. Rabi Sankar had also attacked crypto. He claims to ban crypto trading as it is worse than Ponzi schemes. However, RBI has not imposed any shadowban on crypto exchanges after the Supreme Court in 2020 turned down RBI’s ban on cryptocurrencies.
The regulators and financial bodies worldwide have turned cautious as the crypto market crashed and stablecoins destabilized. In fact, U.S. SEC Chair Gary Gensler expects more crypto turmoil could undermine confidence in traditional markets. The crypto market requires more oversight. Meanwhile, European Central Bank’s President Christine Lagarde asserts crypto is worthless and needs regulatory oversight.
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