The Reserve Bank of India (RBI) has issued a warning about investing in crypto markets following the collapse of stablecoin terrausd and cryptocurrency terra (LUNA). Governor Shaktikanta das stated that “we have been warning against crypto” and pointed out the damage to the crypto market.
The Governor of the RBI on Crypto Market and Regulation
Shaktikanta Das (Gouvernor of the Reserve Bank of India) discussed the downturn in the crypto market and regulation of crypto assets Monday in an interview on CNBC TV18.
The governor stressed that “we have been warning against crypto” and pointed out what had happened to the crypto market.
If we had been regulating it before, people would have raised concerns about regulations.
Since November 2017, the crypto market has lost over $1.5 trillion and nearly $500 billion. The market slump was made worse by the falling of cryptocurrency Terra (LUNA), and algorithmic stablecoin Terrausd (UST).
Das described cryptocurrency as “something whose underlying value (value) is not anything.”
It is not clear how to regulate it. It will severely undermine India’s monetary, financial, and macroeconomic stability, our position is clear.
The RBI also warned recently that crypto could lead the Indian economy to be dollarized.
The governor is confident that the Indian government supports the central bank’s crypto policy. The central bank chief stated that they had communicated their position to the government. They will then make a decision. “I believe the statements and utterances coming from the government are more in line. They are equally concerned.”
Das was also questioned about Brian Armstrong’s statement regarding cryptocurrency exchange Coinbase. He claimed Coinbase India had disabled payments via the Unified Payments Interface(UPI) within days of launch due to “informal Pressure” from the RBI.
“I wouldn’t like to respond on speculative observations made outside,” replied the governor.
Since long, the Indian government has been working to implement cryptocurrency legislation. Officials from the Finance Ministry have been consulting with the International Monetary Fund and the World Bank regarding crypto regulation. In April, Nirmala Sitharaman, Indian Finance Minister, stated that no decision on crypto regulation would be made in a hurry.
In India, cryptocurrency income is taxed at 30%. A 1% tax deducted from source (TDS), will be levying tax on crypto transactions starting in July.