Earlier this week, in an interview with ET Now, Shaktikanta Das, governor of the Reserve Bank of India (RBI), cautioned against putting money into cryptocurrencies as the crypto market may crash. Das noted that the RBI has issued multiple warnings about the risks of investing in cryptocurrency, saying, “I’m happy that we sounded those warning signals, and I would like to believe that a large number of people would have taken note of the warning signals and the concerns expressed by the Reserve Bank.” He elaborated by saying
In light of the warnings and worries voiced by the Reserve Bank, “I’d like to think that many people decided against investing in cryptocurrency or perhaps withdrew from the market entirely.”
The RBI governor continued, saying, “You know, we have said it earlier, crypto can create a lot of financial instability in terms of the central bank’s authority to determine monetary policy.” It will devastate our currency’s value, capital flows, and the health of the financial system.
Even more so, Das said that bitcoin has the “potential to be utilized as a tool for financial fraud and also for unlawful transfer of money.” He also reaffirmed his previous claim, saying, “In fact, I mentioned at one point that it doesn’t have any underpinning, not even a tulip.”
Without something solid underpinning its value, its price is bound to fall at some point; in fact, it has fallen. Investors with less capital on handstand to lose the most, making this a high-risk venture. As the crypto market continues to face some uncertainties and stricter monitoring from some countries, Korea’s Poop-coin got flushed in February.
In July, Das warned that cryptocurrencies pose a significant risk. Amid a market downturn in May, he issued a warning regarding cryptocurrency. After the demise of terra (LUNA) and terrausd, the governor declared, “We have been cautioning against crypto and look at what has occurred to the crypto market now” (UST).
The Reserve Bank of India has proposed that the government of India outlaw all forms of virtual currency. Nirmala Sitharaman, the Indian minister of finance, has remarked that international cooperation is “significantly” needed for either a ban or regulation to be effective.
There is currently no crypto-specific legislation in place in India. A crypto law has been in development by the Indian government for years, but it has yet to be considered by parliament. The finance minister recently cautioned cryptocurrency investors to remain vigilant as authorities probed several cryptocurrency exchanges for possible money laundering activities.