Failing to regulate cryptocurrencies could ignite the next financial crisis, says the chief of India’s central bank.
The next financial crisis will be caused by private cryptocurrencies, if these assets are allowed to grow, warned the governor of the Reserve Bank of India Shaktikanta Das Wednesday, speaking at a banking event.
Private cryptocurrencies refer to digital coins such as bitcoin. Pointing out the recent FTX collapse, Das said that «cryptocurrencies have… huge inherent risks for our macroeconomic and financial stability».
«Cryptocurrencies Should Be Banned»
Calling them «speculative», Das said his main concern is that cryptocurrencies don’t have any underlying value and that he thinks they should be banned.
«It [private cryptocurrency trade] is a hundred percent speculative activity, and I would still hold the view that it should be prohibited… because, if it is allowed to grow, if you try to regulate it and allow it to grow, please mark my words, the next financial crisis will come from private cryptocurrencies,» Das said.
Pushing Central Bank Digital Currency
The Reserve Bank of India is pushing to introduce its digital version of the Indian rupee. The bank began a pilot program for the digital rupee on December 1 for retail use in select cities.
Many central banks around the world are looking into issuing digital versions of their own currency. China’s central bank has been trialing the use of its digital yuan in the real world since late 2020, extending its availability to more users this year.
