Reserve Bank of India Governor Shaktikanta Das on Thursday said private cryptocurrencies are a big threat to the financial and macro economic stability of the country. He also said that those investing in private cryptocurrencies are doing so at their own risk.
“On cryptocurrency, our position has been spelt out and it is clear. Private cryptocurrency is a big threat to macro economic stability. Private cryptocurrencies will undermine RBI’s ability to deal with issues of financial stability,” he said in a press conference on Thursday after a meeting of the Monetary Policy Committee.
He also said that private cryptocurrencies do not have any underlying value.
“It is my duty to say that investors who invest in cryptocurrencies must keep in mind that whatever they are investing is at their own risk. They should also keep in mind that cryptos don’t have any underlying value, not even a tulip,” Das said.
With the Union Budget proposing a tax regime for virtual digital assets, there are expectations by many industry players and investors that private cryptocurrencies will eventually be legalised
However, the Finance Minister Nirmala Sitharaman has clarified that taxing these assets does not automatically grant them legitimacy.
On the proposed Central Bank Digital Currency, Das said the RBI is proeeding cautiously on it, but declined to give a timeline for its launch.
RBI Deputy Governor T Rabi Shankar said it would be the same as a normal paper rupee and would be one-to-one convertible.
“Only its form will be electronic or digital, it can be used technologically using your cell phone. There will be no difference between the physical and digital rupee,” he said, adding that it will be issued by the RBI and will be part of the central bank’s liabilities.
Cryptocurrencies are different and are privately created products, he further said.
He also said technology choices are open and much will depend on the use case.
The Union Budget has proposed that the RBI will issue a central bank digital currency or digital rupee in 2022-23.