Shaktikanta Das, governor of the Reserve Bank of India (RBI), warned lawmakers and banking executives in a crowded room about the significant risk that cryptocurrencies pose to the financial stability of the country.
The governor said on Wednesday that the country is not at war with cryptocurrencies but that there should be a prohibition on their use since they lack any underlying backing.
“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.”
The market, he claimed, determines how much a given “thing” is worth at any one time, but the lack of any underlying content in digital currencies is their biggest worry. He believes that the terms “crypto” or “private cryptocurrency” is only a “fashionable way” to describe an entirely speculative activity.
Cryptocurrency, according to Das, has its roots in the notion that it subverts or undermines the current financial system. He claimed that supporters of cryptocurrency are individuals who do not trust the government’s central bank and the tightly controlled financial system. He continued to mock, claiming that he had not yet heard a convincing justification for its use in the public sphere.
“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,”
Das suggested that the growth of the cryptocurrency market be “prohibited” and warned that the next financial disaster will be brought on by private cryptocurrencies.
“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,”
The Indian Central Bank may be against the idea of private cryptocurrencies but it is certainly not against digital currencies. Todayq News reported earlier that the central bank has shown its interest in a Central Bank issued Digital Currency or the Retail digital Rupee and has already begun its pilot phase.