India’s central bank Governor Shaktikanta Das is warning of the potential for a future financial crisis stemming from private cryptocurrencies, should they be banned outright and not regulated. Das expressed his views at the Business Standard BFSI Insight Summit on Wednesday, recognizing that cryptocurrencies could potentially become destabilizing to the economy.
we firmly believed and do firmly believe even now the cryptocurrencies have absolutely no underlying and we have been we have been sort of I think a lot of noise is coming so you know like uh cryptocurrencies have certain uh huge inherent risks for our microeconomic and financial stability and we have been pointing it out and the developments over the last one year including the latest episode of the built around this FTX, I think after all this I don’t think we need to say anything more about our stand I think the time has only the time has proved that cryptocurrencies are worth what they are today and according to some estimates uh the total value of cryptocurrencies was about 188 billion or 190 billion 180 billion but now the valuation uh you know has come down to about dollars has come down to about 140s 40 140 billion dollars or so about 40 billion value has got really wiped out but change in value in any so-called product is a function of the market but unlike any other asset or unlike any other product our main concern about crypto is that it doesn’t have any underlying whatsoever.
I think the term cryptocurrency private cryptocurrency is a fashionable way of describing what is otherwise a hundred percent speculative activity and there is a talk that you know it should be regulated now how it is to be regulated somebody needs to explain but
I would like to just mention three points
– One the origin the cryptocurrencies, the private cryptocurrencies or their origin to bypass the system to break the system, they don’t believe in the Central Bank, digital Central Bank currency they don’t believe in the regulated Financial World they want to bypass and bid the system
– the second thing is that is the no underlying and not only that I am yet to hear any credible argument about what public good or what public purpose it serves there is still no clarity about it
– and third as I have said it’s a hundred percent speculative activity
And I would still hold the view that it should be prohibited, I mean countries have been taking different views but our view is that it should be prohibited because if it is allowed to grow and you know that if you try to regulate it and allow it to grow
Please mark my words the next financial crisis will come from private cryptocurrencies
Governor Shaktikanta Das – Indian Central Bank Governor
The Reserve Bank of India’s (RBI) governor has made a statement that cryptocurrencies should be prohibited. This statement has gained further significance now that India is the president of the Group of 20 (G-20) nations, giving it the authority to set the agenda. Indian Finance Minister Nirmala Sitharaman has declared that the regulation of crypto assets should be a global priority and will be a major point of discussion during the G-20 summit this year. This shows that India is taking a clear stance on the regulation of cryptocurrencies, and it will be interesting to see how this develops in the near future.