The usage of Bitcoin and other digital currencies has drawn a strong warning from the Reserve Bank of India (RBI). Shaktikanta Das, governor of the RBI, argued that these unstable instruments “are nothing but gambling” and that their apparent value is based solely on “make-believe,” citing the collapse of FTX.
Das repeatedly attacked cryptocurrencies while speaking at a Business Today event, insisting that every asset or financial instrument must have some underlying worth. In line with the tulip manias of the early 20th century, Das claims that bitcoins have no intrinsic worth. He made it clear that cryptocurrency is “nothing but 100% speculation.”
Das highlighted worries about the dangers of IT firms monopolizing payment networks and the growing digitization of payments. He added that because most cryptocurrencies are dollar-denominated, permitting them to exert too much influence could result in the “dollarization” of the economy, which he considers to be particularly bad considering how heavily many economies rely on their own currencies for monetary regulation. So, rather than misclassifying cryptocurrencies as a legal financial products, he advised simply outlawing them.
In November 2021, at the peak of the cryptocurrency bubble, Das expressed grave concerns about the possible effects of cryptocurrencies on the stability of the Indian financial system. What policy alterations result from Das’ assertion is yet to be seen. However, the future looks interesting for India’s cryptocurrency business, which is still hampered by uncertainties.
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