Governor Shaktikanta Das made a new statement on Thursday, a month after reiterating the Reserve Bank of India (RBI) position on cryptocurrencies. Last month, when the cryptocurrency market collapsed due to the Terra meltdown, Das issued a similar statement.
When several India investors lost money due to the crash, he cautioned investors about the volatility of cryptocurrencies. Due to their speculative nature, Das stated on Thursday that investing in cryptocurrencies is a treacherous endeavor.
The RBI Governor described the asset class as a “clear threat.” He continued by stating that we must be aware of the emerging threats on the horizon.
The public must be aware of the impending dangers. Clearly, cryptocurrencies pose a threat. Anything whose value is derived solely from conjecture, without any underlying basis, is speculation.
He indicated that cryptocurrency speculation is occurring under a sophisticated name.
Das explained that the potential for technology to disrupt financial stability must be avoided. However, he acknowledged that technology has expanded the financial sector’s reach and that its benefits must be fully exploited.
While technology has expanded the financial sector’s reach and its benefits must be maximized, its potential to disrupt financial stability must be avoided. As the financial system becomes increasingly digitized, cyber threats increase and require special consideration.
In light of last month’s crash of the Terra, the RBI Governor discussed the difficulties of regulating space. At the time, he stated that regulating cryptocurrencies is difficult because they have underlying value.
Previously, Das characterized the cryptocurrency market as a threat to macroeconomic and financial stability. Privately created cryptocurrency is a threat to our financial and macroeconomic stability, he stated.
Investors should remember that their investments are at their own risk. He added that the cryptocurrency has no underlying, not even tulips.
02 Feb 2023
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