Reserve Bank of India Governor Shaktikanta Das warned that if crypto becomes regulated and is allowed to grow, it could cause the next financial meltdown.
The governor of the reserve bank of India (RBI), Shaktikanta Das, didn't mince his words once discussing the crypto sector at a recent conference, asserting that “private” crypto will be behind future financial crisis.
Speaking at the Business standard BFSI Insight Summit on Dec. 21, Das argued that private cryptocurrencies — those that aren't issued by banks or governments — are backed by nothing and are purely tools for speculation.
“They haven't any underlying worth. they have huge inherent risks for our macroeconomic and financial stability. i'm however to hear any credible argument regarding what public good or what public purpose it serves,” he said.
Adding to those sentiments, Das went on to suggest that a full-scale crypto ban in India would be the best approach moving forward:
“It [private cryptocurrency trade] is a hundred percent speculative activity, and I would still hold the view that it should be prohibited … because, if it is allowed to grow, if you try to regulate it and allow it to grow, please mark my words, the next financial crisis will come from private cryptocurrencies.”
Highlighting samples of such risk, the rbi head pointed to the recent FTX implosion LED by the freshly extradited SAM Bankman fried.
“I do not assume we need to say something additional regarding our stand once the developments over the last one year, as well as the latest episode around FTX,” he said.
Such comments mark another instance during which a key figure in politics or finance has blamed the crypto sector for FTX’s collapse, with several U.S. senators specifically taking the possibility to slam digital assets over the past few weeks.
Das, of course, spoke in way more favorable terms of central bank digital currencies, emphasizing that the rbi is actively pushing to get its digital rupee off the ground.
"You can see in days to come additional and additional central banks will embrace digital currencies and India has been within the forefront of the digital revolution within the current century,” he said.
The rbi has historically had a frosty read on crypto and questioned its worth on many occasions. Das’ latest comments show that the sentiment is simply getting worse, because the bank had previously ranked the sector at the bottom of its list of systemic risks as recently as June.
(BRIAN QUARMBY, Cointelegraph , 2022)