Crypto has no inherent asset, not even tulips: Das

“Our position is very clear. Private cryptocurrencies or whatever you call them are a threat to India’s macroeconomic and financial stability,” Das said in a post-policy conversation with reporters. “Private cryptocurrencies, which have a currency-like nature, will undermine the ability of the RBI to deal with financial issues. Stability.”

Working on plans to launch their own digital currencies to promote financial inclusion, central banks around the world have warned against the risks of privately issued cryptocurrencies ranging from volatility in their value to financial stability. has given. Central banks are particularly apprehensive that decentralized cryptocurrencies could undermine the ability to ensure the stability of the financial system.

However, Finance Minister Nirmala Sitharaman, in her February 1 budget speech, proposed a 30% tax on income from the transfer of “virtual digital assets”, which many have considered lending a measure of legitimacy to crypto as an asset. as seen. The government has not said how it plans to regulate cryptocurrencies.

Sitharaman also said that the RBI will launch a central bank digital currency (CBDC) in the financial year beginning April 1. Das said the RBI is proceeding cautiously with the launch of its digital currency and, therefore, would not disclose a specific timeline.

“Whatever we are doing, it is being done carefully. This is something where one cannot do things in haste, which we do not do. RBI is examining this carefully as there are certain risks involved.”

He believes the biggest risks are cyber security and the potential for counterfeiting, a point he also made in December. “This is a new product and globally, central banks working on CBDCs are proceeding with utmost care, and we are also proceeding with due diligence and caution,” Das said.

CBDC is a digitally issued legal tender issued by a central bank. It is similar to fiat currency and is one-to-one exchangeable with fiat currency. Globally, central banks are exploring digital currencies to counter the rise of private digital assets such as cryptocurrencies, from popularizing the use of electronic currency.

A 2021 survey by the Bank for International Settlements (BIS) found that 86% of central banks were actively researching the potential of a CBDC, 60% were experimenting with it, and 14% were deploying pilot projects. Were.

Deputy Governor T. Rabi Shankar said that RBI has been working on digital currency for 12-18 months. “This budget has proposed amendments to the RBI Act to enable issuance of CBDCs. Once that is done, we can try pilots and proof of concepts,” said Shankar.