RBI Head Says that Cryptocurrencies will Cause Next Financial Crisis

Indian Central Bank Governor claims cryptocurrencies Will Cause Next Financial Crisis

RBI claims cryptocurrencies will cause the next financial crisis. India's central bank Governor Shaktikanta Das has predicted that the next financial crisis will come from "private cryptocurrencies". And he wants to ban the regulation of cryptocurrencies as if they are allowed to be regulated and not banned, they can be a big problem in the future. 

Shaktikanta Das was speaking at the Business Standard BFSI Insight Summit on Wednesday. "Our view is that it should be prohibited because if you try to regulate it and allow it to grow, please mark my words the next financial crisis will come from private cryptocurrencies," Das said. He further added "They have no underlying value. They have huge inherent risks for our macroeconomic and financial stability. I am yet to hear any credible argument about what public good or what public purpose it serves." The term "private cryptocurrencies" is being used to make the distinction between a public cryptocurrency such as India's CBDC and cryptocurrencies such as bitcoin and ether, which are issued by private players, people familiar with the central bank's functioning told CoinDesk. "I think the term private cryptocurrency is a fashionable way of describing what is otherwise a 100% speculative activity and there is a talk that it should be regulated," Das mentioned.

The Reserve Bank of India's (RBI) governor has previously stated that cryptocurrencies should be prohibited. These comments assume significance at a time when the nation is holding the presidency of the Group of 20 (G-20) nations, giving it the power to set the agenda around discussions regarding global crypto rule-making. Indian Finance Minister Nirmala Sitharaman suggested how regulating crypto assets should be an international priority and will be a big topic of discussion during its G-20 presidency. The RBI's entourage of more than 20 people, according to sources, has been attending these G-20 meetings in India over the past few days where different nations are presenting their views on how to regulate the space.