India’s banking sector regulator used the market crash to support his argument that crypto has no underlying value and justify his stance that it can be a threat to financial stability.
RBI Justifies Not Regulating Crypto
Reminding his often repeated caution to the people, Reserve Bank of India (RBI) Governor Shaktikanta Das said that had the central bank regulated digital assets, it would have been difficult to explain the latest market crash.
“We have been cautioning against crypto and look at what has happened to the crypto market now. Had we been regulating it already, then people would have raised questions about what happened to regulations,” the banking sector regulator told CNBC TV18 in an interview.
The Downturn in Crypto Market
The cryptocurrency market is currently witnessing a downturn that has seen it shed more than half of its value since its all-time high of $3 trillion in November 2021. $25,000 earlier this month before rebounding and staying flat at $30,000 for days now.
“This is something whose underlying (value) is nothing. There are big questions on how you regulate it. Our position remains very clear, it will seriously undermine the monetary, financial, and macroeconomic stability of India,” the RBI Governor added.
Government in Sync with RBI Stance
The central bank’s position on cryptocurrencies is in sync with the federal government, he said. “We have conveyed our position to the government and they will take a considered call. I think the utterances and statements coming out from the government are more or less in sync. They are also equally concerned,” Das said.
Recently, top RBI officials briefed a parliamentary panel on finance where they said the adoption of cryptocurrencies can lead to the dollarization of part of the economy and it’s a threat to the sovereign right of the government to determine the monetary policy and flow of money into the economy.
No Comments on ‘Informal Pressure’
The bank’s chief refused to comment on Coinbase CEO Brian Armstrong’s observation that RBI used “informal pressure” to deny instant inter-bank retail payment system UPI to the crypto exchange, forcing it to disable deposit option in the Indian rupee. Instead, he said, “I would not like to react on speculative observations made by individuals outside.”