RBI governor casts doubt on cryptocurrency market cap, says ‘investors look overbought’

New Delhi: double resistance, Reserve Bank of India Governor Shaktikanta Das on Wednesday said that cryptocurrencies pose a serious threat to financial stability in the country. The governor also cast doubt on reports suggesting the number of crypto users and the market value they claim.

Shaktikanta Das said that cryptocurrencies being unregulated by any central bank or authority is a serious threat to any financial system. “Cryptocurrency is a serious concern for the RBI from a macroeconomic and financial stability perspective. The government is actively considering the issue and will take a decision. But as central bankers, we have serious concerns about it. And we have flagged it many times,” Das said at an event.

Expressing his doubts on the number of cryptocurrency investors and their claimed market cap, Das said, “I am not sure about the veracity of such numbers as these virtual currencies are not controlled by RBI or any other central bank. But I still think the numbers look clearly exaggerated by the number of investors as most of them, like over 70%, have invested only Rs 1,000 in cryptocurrencies.”

RBI had issued a circular banning cryptocurrencies in the country. The circular was quashed by the Supreme Court in 2020. A year later in February 2021, the central bank convened an internal panel to come up with a model for a central bank digital currency. The panel’s report is expected next month.

While the RBI governor cast doubts on reports claiming the number of crypto investors in India, a recent report by Broker Discovery and Comparison Platform, BrokerChusser in its report stated that India has the highest number of crypto investors in the world.

According to its report, India currently has 10.07 crore crypto owners in the world. The report also stated that in terms of the percentage of crypto owners to the total population of that country, India was ranked fifth at 7.30%.

The central bank intended to come up with an official digital currency. Earlier this year the central government planned to introduce a bill in Parliament to ban the trading of all private cryptocurrencies in the country. The bill has not yet been introduced in Parliament.