RBI Governor Remains Critical of Crypto, Says World Can Not Take Crypto Mania Like Tulip Mania

Source: X / @FinMinIndia

The governor of the Reserve Bank of India, Shaktikanta Das, has reiterated the central bank’s negative stance on crypto. He said that the RBI’s position on cryptocurrency remains unchanged.

“Traveling down that path will create huge risks. I don’t think the world or emerging markets can take a crypto mania like the Tulip mania,” RBI governor said Thursday morning at the Mint’s BFSI Summit.

Earlier, the central bank’s governor had called crypto a “serious threat to financial stability for all countries, especially for emerging markets”.

The RBI governor also talked about the country’s CBDC project during the recent summit saying, “We’re expanding wholesale CBDC and exploring the potential for programmable features in retail CBDC to enable senders to define specific end uses.”

India’s Central Bank Sees no Upside in Regulating Crypto

As reported earlier, Governor Das said that the central bank does not see any upside in regulating the crypto industry.

Referring to the International Monetary Fund (IMF) and Financial Stability Board (FSB) synthesis paper, the central bank chief expressed his concerns asking “How will you regulate it, whom will you regulate, and what will you regulate?”

He pointed out the lack of a clear, universally accepted definition of what cryptocurrencies represent. Das questioned whether cryptocurrencies should be classified as products, financial assets, or something entirely different due to their intangible nature.

Will India Regulate Crypto in 2024?

India’s crypto community has been lobbying to get crypto regulations for a long time now. With the recent progress in the G20 summit where India agreed to bring regulations to the industry was hailed as a positive step by many towards bringing regulations to the industry. However, there is still a lot of uncertainty on how the government will proceed.

In a recent interview with Cryptonews.com, Catax founder Gaurav Mehta shed light on how the country could move forward in regulating crypto.

Gaurav noted that given India has a protectionist economy, meaning the government closely oversees the funds flowing outside of the country, unlike the developed countries like the USA or UK, it is unlikely that crypto regulations will be similar to those countries. However, India currently has a community of more than 15 million investors who have a vested interest in crypto and are trying to convince the government to bring regulations. Gaurav further added that given India’s economic position, there could be regulations that separate crypto trading from crypto ownership. He added:

“We may have something where people would be able to create a Demat-like account on the crypto exchanges and would be able to buy and sell their crypto. But to transfer the crypto from India to somewhere else that clearance would be done by National Securities Depositories Ltd (NSDL) and Central Securities Depositories Ltd (CDSL) like entities.”

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