Reserve Bank of India Governor Shaktikanta Das during a press conference stated that private cryptocurrencies are a major threat to the macroeconomic and financial stability of the country. RBI Governor Das said: “As far as cryptocurrencies is concerned, the RBI stance is very clear. Private cryptocurrencies are a big threat to our financial and macroeconomic stability. They will undermine RBI’s ability to deal with issues related financial stability.”
RBI has remained critical of cryptocurrencies as it believes there is no intrinsic value in the digital asset. In the case of a share market, there is an underlying business but in cryptos, there is only an algorithm. The RBI The governor has said on multiple occasions flagged the concern about financial stability.
RBI governor spelled out his stance on crypto investments during Thursday’s press briefing. He said: “I think it is my duty to tell investors that what they are investing in cryptocurrencies, they should keep in mind that they are investing at their own risk. They should keep in mind that these cryptocurrencies have no underlying (asset). Not even a tulip!”
RBI governor’s remarks come days after Union Finance Minister Nirmala Sitharaman announced in her Budget 2022 speech a tax, being called the ‘crypto tax’ on gains on virtual assets. The minister said 30 per cent tax will be levied on transfer of digital assets. Though the finance minister maintained that taxing an asset does not legitimise it, industry watchers believe that clarity on tax policy is the first step towards regulation.
The RBI also said that Digital Rupee is like the paper rupee, just the form will be electronic or digital. The deputy governor T Rabi Sankar said that it will be 1-to-1 convertible. Only it will be digital in nature. Like a normal rupee is kept in your purse or pocket, the digital rupee will be kept in your cell phone device.
“Like how you keep the paper rupee in your wallet, digital rupee will be kept in the device. There is no difference between the two. The only difference between Digital Rupee and cryptocurrency is that the former will be issued by the RBI. Like the rupee note, this will also be part of the liability. Cryptocurrencies are privately-created products,” said RBI deputy governor during the virtual meeting.
Speaking about the timeline, the governor said that RBI Digital Rupee will be launched in the year 2022-23.
Earlier, FM Sitharaman, during her budget speech said that the Reserve Bank of India (RBI) will launch a central bank digital currency (CBDC) in 2022-23, marking the first official statement from the Union government on the launch of much-awaited digital currency. She further said that the introduction of CBDC will give a boost to the digital economy.