Cryptocurrency ‘Not Even a Tulip,’ says India’s Central Bank Chief

RBI preparing to launch own digital currency

Shaktikanta Das, the governor of India’s central bank, said digital tokens have no intrinsic value and pose a risk to financial stability.

“Cryptocurrency investors should remember that they do so at their own risk. A tulip, for example, is a symbol of the 17th century Dutch tulip bulb market bubble.

In recent days, the Indian government has clarified the legal status of crypto trading. In her budget speech on Feb. 1, Finance Minister Nirmala Sitharaman announced high taxes on such transactions, effectively treating them as legal but discouraged gambling winnings. We await regulations.

The RBI, meanwhile, is strongly opposed to private digital currencies. Due to the nature of cryptocurrencies, the central bank is concerned about capital controls, especially given its tight grip on the partially convertible Indian rupee. Concerns have been raised about money laundering and terrorism financing.

A big threat to our macroeconomic and financial stability is private crypto currency, Das said.

To counteract the impact of cryptocurrencies, the RBI is creating its own digital rupee, though Das refused to say when it will be ready. In her budget speech, Sitharaman stated that a central bank digital currency would be ready by April 1.

“We are making progress on CBDCs after examining it carefully,” he said. “The biggest threat is cybercrime and counterfeiting. We must prevent this.”

 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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