Reserve Bank Governor Shaktikanta Das on Wednesday pushed for the ban on instruments like bitcoin, warning that if such speculative instruments are allowed to grow, private cryptocurrencies could spark the next financial crisis.
That has spoken out resolutely against such instruments RBI has taken his allegation all the way to the Supreme Court.
“cryptocurrencies… have huge inherent risks from macroeconomic and financial stability (perspective) and we have pointed this out,” he said at an event organized by Business Standard here.
The RBI governor added that last year’s developments, which include the recent cryptocurrency exchange crash, come on top FTXdescribed as one of the largest financial scams in US history illustrate the threat posed by such instruments.
“After all that, I don’t think we need to say anything more about where we stand,” Das said, adding that the valuation of private cryptocurrencies is $190 billion and there is no underlying value for the market price.
“It’s 100 percent speculative activity and I would still believe it should be banned…if you’re trying to regulate it and let it grow, please mark my words, the next financial crisis will be private.” Cryptocurrencies are coming.” he said.
He acknowledged that different jurisdictions take different stances on this, but the RBI wants to maintain its stance of banning them outright.
Das said the origin of private cryptocurrencies lies in their intention to “break” the system, not believing in fiat currencies launched by central banks and not believing in a regulated financial system.
“They want to bypass and beat the system,” Das said, adding that he has yet to come across a credible argument that can demonstrate that such private cryptocurrencies serve the public good.
