Threats from private cryptocurrencies, risk of fraud, illegal acts: RBI report
The Reserve Bank of India said on Wednesday that the proliferation of private cryptocurrencies around the world has left regulators and governments vulnerable to the associated risks.
According to Cryptocurrency, for the immediate risk of fraud, for anti-money-laundering efforts, and for fighting the financing of terrorism.
Furthermore, given the highly speculative nature of these assets, there is a potential for extreme price volatility, RBI said in its latest Financial Stability Report.
“Long-term concerns are related to capital flow management, financial and macro-economic stability, monetary policy transmission and currency substitution,” the report said.
Further, on NPAs of scheduled commercial banks, RBI expects gross non-performing assets to rise from 6.9 per cent in September 2021 to 8.1 per cent by September 2022 and 9.5 per cent under a severe stress scenario.
In addition, the report noted that inflationary pressures in food and energy have increased significantly in recent months, with food prices well above their long-term growth rates.
“The outlook appears uncertain as supply constraints gradually ease, global liquidity and monetary policy regimes begin to recalculate to normalize, and demand picks up,” the report said.
“However, demand for industrial and base metals on the back of global investment in decarbonization is likely to strengthen. Inflation pressures are reinforced by declining food production, supply-side disruptions and rising input costs.”
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