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Private cryptocurrency will trigger the “next financial crisis”, says Indian central bank’s governor

Shaktikanta Das frowns on cryptocurrencies again, saying they should be “prohibited”, while claiming that CBDC will be the norm in the future

“I would still hold the view that it (cryptocurrencies) should be prohibited…countries have been taking different views but our view is that it should be prohibited because if it is allowed to grow, if you try to regulate it and allow it to grow, the next financial crisis will come from private cryptocurrencies,” the Reserve Bank of India (RBI) governor Shaktikanta Das said at the BFSI Insight Summit 2022 organised by Business Standard on December 21, 2022. Das said that he was of firm belief that cryptocurrencies have no underlying value which was the main concern. He added that digital assets pose huge risks to India’s macroeconomic and financial stability, arguing that the term “private cryptocurrency” was a fashionable way of describing a “speculative activity”. Das pointed out that the central bank does not “need” to say anything about their stance following the developments in the last one year— including the latest one concerning FTX. He stated that the total worth of cryptocurrencies has seen an erosion of $40 billion after their value shrunk from $180 billion to about $140 billion. Why it matters: The comments are significant as the RBI governor is one of the most influential voices in matters of economic policy. The governor’s opinions are likely to influence the Indian government which is in the process of coming up with a regulatory framework to govern virtual digital assets. Das' remarks at the summit: Das said that he is not convinced with how one would regulate crypto assets…

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I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

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