The Governor of the Reserve Bank of India, Shaktikanta Das, has stated that while India is not at war with digital currencies, the use of private cryptocurrencies could lead to the next financial crisis.
Das added that cryptocurrencies lack underlying fundamentals and should be prohibited. He explained that they pose a significant risk to the macroeconomic stability of the country.
Das also addressed the recent upheaval in the cryptocurrency industry, warning of a potential financial crisis in the future, which he believes will be fueled by private digital assets.
Shaktikanta Das stated:
“It should be prohibited because if it is allowed to grow … say it’s regulated and allowed to grow … please mark my words that the next financial crisis will come from private cryptocurrencies.”
According to Das, the market determines the worth of any supposed product. However, the biggest concern with cryptocurrencies is that, unlike other assets or products, they have no tangible underlying foundation. Private cryptocurrency, in his opinion, is a trendy term for “what is otherwise a 100% speculative activity.”
Das opined that cryptocurrencies are used to evade and undermine financial systems. He also mentioned that he is yet to hear a convincing argument for how cryptocurrencies serve the public good.
Das added stating:
“They don’t believe in the central bank, they don’t believe in a regulated financial world. I’m yet to hear a good argument about what public purpose it serves.”
On December 19, the Indian government updated the Lok Sabha, the lower house of parliament, on its cryptocurrency bill and probe of cryptocurrency exchanges.
The top brass of the Indian Ministry of Finance, which is the government entity in charge of regulating digital assets such as non-fungible tokens (NFTs), real estate tokens, and other blockchain-based assets, were subject to an inquiry by parliament member Bhartruhari Mahtab.
According to Pankaj Chaudhary, the Minister of Finance to the State, the Ministry of Finance is currently in charge of policy related to crypto assets and the ecosystem surrounding them.
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