- Shaktikanta Das, the RBI head says, the next financial crisis will be caused by private cryptocurrencies.
- Das asserted that the introduction of the CBDC will aid the Indian economy.
Shaktikanta Das, the Governor of India’s central bank, The Reserve Bank of India (RBI), has issued a cautionary statement regarding cryptocurrencies. On Wednesday, the RBI governor declared that private cryptocurrencies will create the next financial catastrophe. He added that he still believes in the need for cryptocurrency regulation.
Shaktikanta stated:
Cryptocurrencies, without a stable origin, are bound to bypass and break the system (Government). The total value descended to $140 billion wiping off $40 billion. They have no underline and I yet have to hear good arguments about what public good it serves and that it is a speculative activity.
While speaking at the Business Standard BFSI Insight Summit, Das expressed that private cryptocurrencies have no intrinsic value. Also, cryptos are dangerous for macroeconomic and financial stability.
RBI to Transform Indian Finance Sector
At the conference, the RBI head mentioned the need for the Central Bank of Digital Currency (CBDC). He asserted that the CBDC is essential and that it does not require intermediaries, by adding, “Logistics Wise CBDC will be much faster and it is a currency in itself.”
According to Das, the introduction of the digital rupee will aid the Indian economy. It will reduce operating costs connected to physical cash administration, improve payment settlement efficiency, and foster innovation in cross-border payments. In contrast to the UPI, which uses banks as intermediaries, Das explained how CBDC operates like normal currencies. Furtherly, the CBDC will allow for immediate international money transactions.
In response to the US Federal Reserve’s outlook, Das stated that the Fed’s decisions matter to everyone. As a majority of trades are still denominated in dollars. He further stated that our growth-inflation dynamics regulate and drive the RBI’s monetary policies.
