Cryptocurrencies Pose Big Risks to Economy And Financial System RBI Governor

The segment of cryptocurrencies has grown rapidly in the country in the last few years. However, many cases of scams are also happening in this segment. The Reserve Bank of India (RBI) has again warned regarding cryptocurrencies. Along with this, cryptocurrencies have been described as a big risk to financial and monetary stability.

RBI Governor Shantikanta Das said at an event at the think tank Peterson Institute for International Economics, “I believe that it should not be allowed to dominate the financial system. This poses a big risk to the financial stability. Banking system from cryptocurrencies. There is also a risk. This may create a situation in which the Central Bank may lose control over the supply of funds in the economy. He said, “If the Central Bank has no control over the supply of funds in the economy, how will the available liquidity in the system be assessed?”

Responding to a question, Das said, “We see crypto as a big threat. There should be an international understanding for this because these transactions also happen outside the country. I believe that it should not be encouraged.” He told that India was the first country to raise questions regarding cryptocurrencies. Under the country’s presidency of the G20, an agreement was reached on building an international understanding to deal with the entire crypto ecosystem. Some progress has been made in this regard. Last year, RBI had reiterated the demand to ban cryptocurrencies.

On this, Das had said, “We have clarified the position on crypto many times and we stand by it. Information about the risks in crypto is also given in the synthesis paper of IMF-FSB. Regulation is on a scale of zero to 10. “Zero regulation would mean no regulation and it’s open to all and 10 would mean you don’t allow it. The FSB has to be careful about regulation.” In this paper, an argument has been made against a complete ban on activities related to cryptocurrencies. It said that such a step could be costly and would be technically difficult to implement. Earlier, RBI had warned that the next financial crisis could be caused by private cryptocurrencies.