Last Update: January 14, 2023, 07:51 AM IST
RBI Governor Shaktikanta Das. (file photo)
Shaktikanta Das reiterates the need for a complete ban on crypto, however its supporters call it an asset or a financial product
Reserve Bank Governor Shaktikanta Das on Friday reiterated his call for a complete ban on cryptocurrencies, saying they are “nothing but gambling” and their alleged “worth is nothing but make-believe”. Compared to other central banks, the RBI recently launched its own digital currency (Central Bank Digital Currency) in the form of e-rupee on pilot mode, first for wholesale at the end of last October and a month later for retail customers. For.
speaking in a Business At the event here this evening, Das reiterated the need for a complete ban on crypto, although its proponents call it an asset or a financial product, it has no inherent value, not even a tulip. (Dutch tulip mania shock- early part of last century).
“Every asset, every financial product must have some underlying (value), but in the case of crypto there is no underlying…not even a tulip…and the growth of the market value of crypto is based on trust. So without Anything of an underlying, the value of which is solely dependent on belief, is nothing but 100 percent speculation or to put it very simply, it is gambling,” the governor said.
“Since we do not allow gambling in our country, and if you want to allow gambling, consider it as gambling and set gambling rules. But crypto is not a financial product,” Das insisted. Told.
Warning that legalizing crypto would lead to more dollarization of the economy, he said that crypto is a completely wrong argument disguised as a financial product or financial asset.
Explaining this, he said that the major reason for banning them is that cryptos have the potential and characteristics to become a medium of exchange; transaction exchange.
Since most cryptos are dollar-denominated, and if you allow this to grow, assume a situation where 20 percent of transactions in the economy are through cryptos issued by private companies.
Central banks would lose control of that 20 percent of the money supply in the economy and the ability to decide on monetary policy and liquidity levels. The authority of central banks will be reduced to the extent that this will lead to dollarization of the economy.
“Please believe me, these are not empty alarm signals. A year back in the Reserve Bank we said that this whole thing is likely to end sooner or later. And if you look at the development of last year, the climax in the FTX episode But, I think I need not add anything more,” said Das.
Asked whether there is any threat to the security of banking with the growing digitization of payments, Das said banks have to ensure that they are not swallowed up by the big technology that controls most digital transactions today.
“The issue of data privacy and robustness of technical infrastructure of banks should be the focus of the banks. As many banks are actively involved with many big tech, their challenge is to ensure that this does not create a situation where banks are swallowed up by big tech. Banks should take their own decisions and should not be dominated by big tech.
On CBDCs being piloted now, he said central bank-issued digital currencies are the future of money and its adoption could help save on logistics and printing costs.
“I think CBDC is the future of money,” said the governor, “since a lot of central banks are working on it/doing it and we can’t be left behind, but at the same time we have to make sure Its technology strong and very safe and sure it is not clone or fake.
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