Shaktikanta Das, Governor of RBI, has warned that the crypto markets could crash and that small investors may lose their money. He stated that many people have been dissuaded from investing in cryptocurrency because of his warnings.
In an interview with ET Now, Shaktikanta das, governor of India’s central bank, the Reserve Bank of India, (RBI), warned against investing in cryptocurrency earlier this week.
Das noted that the RBI had warned investors several times about the dangers of investing in crypto. He said that “I’m happy we sounded those warning signs and I would like for people to have taken note of the warning signals, and the concerns expressed the Reserve Bank.”
I’d like to believe that crypto was not a popular investment or that crypto investors pulled out due to the Reserve Bank’s concerns and cautions.
The RBI governor said, “Crypto, as you know, we’ve already stated it before, it can cause a lot of financial instability in terms of central bank’s ability to decide monetary policy.” It will also have adverse effects on our exchange rate, capital flows, and stability in the banking sector.
Das also warned that cryptocurrency could be used to launder money and illicitly transfer money.
The Indian RBI central bank governor said:
If there is no underlying, prices won’t stay high and so it could crash.
In July, Das stated that cryptocurrencies were a clear threat. He warned in May about crypto’s potential dangers amid a market crash. After the collapse of crypto terra (LUNA), and stablecoin terrausd(UST), the governor stated that he had been warning against crypto and was now concerned about the market.
The RBI recommended that India ban cryptocurrency, including bitcoin and other ether. Indian Finance Minister Nirmala Sitharaman stated that regulation and banning cryptocurrency must be effective only with “significant” international cooperation.
India doesn’t yet have a regulatory framework for cryptocurrency. While the Indian government has been working for a bill to regulate crypto-assets for several years, it has not yet been approved by parliament. The finance minister recently asked crypto investors to exercise caution because authorities are investigating several crypto exchanges in money laundering investigations.