27. January 2023

RBI Warns Against Bitcoin, Seeks to Regulate Crypto Industry in India

•The Central Bank of India has been showing strong hostility towards crypto for a long time now.
•The Reserve Bank of India (RBI) governor Shaktikanta Das has expressed severe concerns about regulating the industry.
•The RBI governor has called crypto an ‘unstable instrument,’ which is ‘nothing but gambling’ as private digital assets hold no intrinsic value whatsoever.

Cryptocurrency has been gaining more and more traction in India, a country that inhabits 17.7% of the world’s population. With the rising popularity of cryptocurrency, the Central Bank of India has been displaying strong hostility towards the digital asset. The Reserve Bank of India (RBI), headed by governor Shaktikanta Das, has been expressing severe concerns about regulating the industry and has made efforts to come up with a way to monitor and control the use of cryptocurrency.

The situation was further aggravated due to the crash of FTX, a cryptocurrency exchange. Governor Das has repeatedly called crypto an ‘unstable instrument’ and has gone on to say that it is ‘nothing but gambling’ as private digital assets hold no intrinsic value whatsoever. He also stated that private digital assets should be banned as it holds a ‘make-believe factor’. At the Business Today Banking and Economy Summit, Governor Shaktikanta Das mentioned that the FTX crash has proven how cryptocurrency being a speculative industry is detrimental to the economy.

The RBI governor has also stressed that the influx of private digital assets could cause the dollarization of the Indian economy, which is not ideal for the nation. He deems that the volatility of cryptocurrency poses a major risk to the economy, and that it has the potential to destabilize the financial system. In his opinion, it is important to keep a watchful eye on the industry in order to protect the economy and its citizens.

The Central Bank of India has now issued a stern warning against the use of Bitcoin and other virtual currencies. Investors and enthusiasts are now on guard as the annual budget date draws closer. To sum it up, the Reserve Bank of India is determined to regulate the cryptocurrency industry in India in order to protect its citizens and the economy from any potential risks.