Reserve Bank of India’s Chief Says Crypto Needs to be Stopped

Influenced by the recent implosion of the FTX Derivatives Exchange, the governor of the Reserve Bank of India (RBI) Shaktikanta Das has told a group of banking executives and lawmakers that cryptocurrencies hold several risks, especially to the macroeconomics and stability of a nation.

In his opinion, the next huge financial crisis will be caused by digital assets if the industry is not intercepted now. Das thinks the use of crypto should be prohibited.

“After the development of the last one year, including the latest episode surrounding FTX, I don’t think we need to say anything more. Time has proven that crypto is worth what it’s worth today,” Das started adding, “Change in value in any so-called product is the function of the market. But unlike any other asset or product, our main concern with crypto is that it doesn’t have any underlying whatsoever. I think crypto or private cryptocurrency is a fashionable way of describing what is otherwise a 100% speculative activity.”

India Puts Active Work Into CBDC

When referring to private currencies, Das means to talk about digital coins kike Bitcoin (BTC) whose price has plunged more than 75% from its all-time high in November 2021.

These comments by the RBI chief come as the nation considers launching its own Central Bank Digital Currency (CBDC), Digital Indian Rupees. The RBI started considering a graded approach for implementing its CBDC in June.

As per a published statement, the RBI suggested a step-by-step approach through stages of proof of concept, pilots, and the launch.

“The reserve bank is engaged in the introduction of a central bank digital currency (CBDC) in India. The design of CBDC needs to be in conformity with the stated objectives of monetary policy, financial stability, and efficient operations of currency and payment systems.”

Finally, its pilot program kick-started a few months ago in collaboration with nine banks amongst which are State Bank of India, Union Bank of India, Bank of Baroda, HDFC Bank, Kotak Mahindra Bank, ICICI Bank, Yes Bank, HSBC, and IDFC First Bank.

Apart from its push for its digital currency, India has been stringent with the crypto ecosystem in the region.