Indian Central Bank Governor Shaktikanta Das predicts that the next financial crisis would originate from “private cryptocurrencies”, as he speaks to attendees at the Business Standard BFSI Insight Summit on Wednesday. He voiced publicly that they believe these cryptocurrencies should be banned since they have “no underlying value”.
“They have huge inherent risks for our macro economic and financial stability,” said Shaktikanta, pointing to the recent FTX collapse as recent development. “I am yet to hear any credible argument about what public good or what public purpose it serves.”
This term “private cryptocurrencies” may have been used to describe cryptocurrencies belonging to private holders, in comparison to government-issued ones like India’s very own Central Bank Digital Currency (CBDC), the e-rupee. Shaktikanta opined that these cryptocurrencies are “a fashionable way of describing what is otherwise a 100% speculative activity” and believes that they are created out of desire to “bypass or break the system.”
These comments come at a time when the entourage from the Reserve Bank of India have been attending G-20 (Group of 20 nations) meetings to learn how these countries plan to regulate the cryptocurrency space. According to Das, these countries take on various stances. “I don’t think we need to say anything more about our stand after the developments over the last one year including the latest episode around FTX,” said Das.
Tamal Bandyopadhyay then asked if India’s CBDC is “an optic to fight crypto”, to which Das replied that he thinks that’s “how the world is going to evolve,” imagining India to be the “forefront of the digital revolution of the current century” as more central banks embrace cryptocurrency.
