Taking a firm stand against the growing global wave of cryptocurrency acceptance, Shaktikanta Das, Governor of the Reserve Bank of India (RBI), reiterated the central bank's warning on the risks of cryptocurrencies. Despite recent developments such as the US approval of Bitcoin ETFs, Das emphasized the potential risks for both emerging and developed economies, underscoring the difficulty of containment in the future. This comes as a reminder that India remains wary of the crypto craze, believing that these digital assets lack fundamental value and pose threats to economic stability.
The Indian Reserve Bank's cryptocurrency stance has not changed despite global trends
Reserve Bank of India (RBI) Governor Shaktikanta Das has clarified that the RBI's stance on cryptocurrencies remains unchanged, regardless of international developments. Regarding giving the green light to Bitcoin ETFs in the US, Das while speaking at the Mint BFSI Summit stressed, “Our position, mine and the RBI’s position on these (cryptocurrencies) remains unchanged regardless of who is doing what.”
Additionally, he expressed concerns about the risks associated with embracing cryptocurrencies, and highlighted the potential consequences for both emerging and developed economies. Das took on the cryptocurrency industry, expressing his doubts by saying that he believes the world and emerging markets cannot withstand a crypto craze similar to the historical “tulip mania.”
Drawing parallels with historical financial bubbles, he questioned the feasibility of effective regulation in this booming industry. Referring to the October 2023 International Monetary Fund (IMF) paper, Das reiterated the need for countries to consider imposing additional restrictions on cryptocurrencies to ensure financial stability.
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India's vision for central bank digital currency
Maintaining a cautious approach towards cryptocurrencies, Governor Das highlighted India's quest for central bank digital currencies (CBDCs). According to its recent interview, the Reserve Bank of India (RBI) is actively exploring expanding the scope of wholesale CBDCs and investigating programmable features in retail CBDCs. Notably, this approach aims to enable senders to specify specific end uses for the digital currency.
The successful implementation has contributed to the RBI's target of achieving 1 million daily transactions by the end of 2023. Additionally, the RBI and India's National Payments Board are in talks with several countries to adopt the unified Indian Payments Interface for cross-border transactions. Reflecting India's commitment to shaping the future of digital finance.
Meanwhile, the Reserve Bank of India in India stands firm in its cautious approach towards cryptocurrencies, and stresses the need for a thoughtful and strategic path forward in the rapidly evolving digital financial landscape.
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