The Reserve Bank of India (RBI) has cautioned people against investing in cryptocurrency, adding that cryptos can seriously undermine India’s financial and macroeconomic stability.
“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,” Moneycontrol quoted RBI Governor Governor Shaktikanta Das as saying in an exclusive interview to CNBC TV18.
The RBI’s stance on crypto seems to be the same as it was at the beginning of this year – exercise caution. In fact, the RBI has been cautioning Indian crypto investors against cryptocurrencies since a while now, and continues to do so now as well.
Cryptocurrencies work using a technology called Blockchain, but derive their value from their practical use case. The RBI says that cryptocurrencies have no underlying value, but on the contrary, are very much capable of undermining a country’s monetary, financial and macroeconomic stability, including India’s.
“This is something whose underlying (value) is nothing. There are bigger questions on how do you regulate it. Our position remains very clear, that it will seriously undermine the monetary, financial and macroeconomic stability of India,” said Das.
RBI Deputy Governor T Rabi Sankar had last month said that Stablecoins presented a bigger threat to economic stability than other cryptocurrencies. He even compared cryptocurrencies with the Dutch White Tulip reference and said that they are even worse than them.
The RBI has said that the central government is also in sync with them on cryptocurrency and that they too think that cryptos have no underlying value.
“We have conveyed our position to the government and they will take a considered call on this. I think the utterances and statements coming out from the government are more or less in sync with our thoughts on crypto. They are also equally concerned,” Das added.
Three months ago, the Reserve Bank of India (RBI) was pushing for faster economic growth after the slump caused by the Covid-19 pandemic. But now, due to several factors including the recently highlighted high inflation data, rising commodity prices, and others, has changed its stance.
“In February, we had assumed crude oil to be under $100/bbl and the roadmap in February showed that inflation would moderate,” Das said in his interview with CNBC TV18.
That said, despite the rise in prices and fall in value of the rupee, imports are on a rise.
“The export sector continues to be very strong. Imports have also picked up, and increased imports show that domestic demand is reviving, and we have high imports despite rising prices,” said Das.
