Reserve Bank of India (RBI) Shaktikanta Das sounded the alarm over cryptocurrencies while cautioning investors on the potential pitfalls of the digital currency.
Das said on Wednesday that cryptocurrencies are a very serious concern from the point of view of macroeconomic and financial stability.
Shaktikanta Das’s remarks come at a time when the craze for cryptocurrencies among Indian investors, especially retail investors, is on the rise.
After the Supreme Court overturned the RBI order, which effectively lifted the ban on cryptocurrency trading in India, the craze in India has grown at a furious rate.
The central government is yet to legislate on cryptocurrencies in consultation with industry experts, comments from various officials and ministers.
After several rounds of caution, the government may wish to set severe limits on trading of cryptocurrencies in India in the public interest at large.
In cryptocurrencies, the price of bitcoin and ether declined today after hitting record highs on Tuesday as both virtual token currencies pulled back from their highs. Both have more than doubled since June and are up nearly 70% against the dollar since early October.
The world’s largest cryptocurrency by market capitalization was trading down one per cent at $67,089. The market for digital assets, a little over a decade old, has nearly quadrupled from its 2020 year-end value. Bitcoin has gained over 131% year-on-year (YTD).
According to Bloomberg News, the total value of all cryptocurrency assets has exceeded $3 trillion.
Commenting on the state of the Indian economy, Shaktikanta Das said that he sees a very positive outlook as far as India’s growth is concerned, even with the uncertainty of COVID.
Shaktikanta Das further said that the interest rate market development appears to be quite orderly, while expressing confidence that adequate forex reserves will give a cushion to tide over volatility.
On the investment outlook, Das said there are signs of a pick-up in investment and demand for bank credit will pick up from next year.
The RBI chief further said that geopolitical tensions globally are posing new challenges and he has to be cautious.
Never miss a story! Stay connected and informed with Mint.
download
Our App Now!!
,