Home Markets India’s Central Bank Governor Warns Crypto Market Could Crash, Small Investors Will Lose Money CryptoBlog

India’s Central Bank Governor Warns Crypto Market Could Crash, Small Investors Will Lose Money CryptoBlog

India’s Central Bank Governor Warns Crypto Market Could Crash, Small Investors Will Lose Money CryptoBlog

RBI Governor Shaktikanta Das has warned that the crypto market could crash and small investors will lose money. He added that the central bank believes its warnings have deterred many people from investing in cryptocurrencies.

RBI Governor Crypto Warnings

Governor of India’s central bank, the Reserve Bank of India (RBI), Shaktikanta Das, warned against investing in cryptocurrency in an interview with ET Now earlier this week.

Noting that the RBI has repeatedly warned investors about the risks of investing in crypto, Das said, “I am glad we sounded these warning signals and would like to believe that a large number of people would have taken note of the warning signs and the concerns expressed by the Reserve Bank. He added:

I’d like to believe… that a lot of people haven’t invested in crypto or somehow got out of crypto thanks to warnings and concerns from the Reserve Bank.

“Crypto, you know, we said earlier, it can create a lot of financial instability in terms of the central bank’s ability to determine monetary policy,” the RBI Governor continued. “It will also have a negative impact on our exchange rate, on capital flows, on the stability of the banking sector.”

Additionally, Das warned that cryptocurrency has the “potential to be used as a tool for money laundering and illicit money transfer.” He also reiterated his previous statement: “In fact, I said at one point that there was no underlying, not even a tulip.”

India’s central bank governor said:

Something that doesn’t have an underlying, the prices won’t stay high all the time so it can crash, and it crashed, eventually… it’s the small investors who lose money so it is a big risk for small investors.

Das said in July that cryptocurrencies are a clear danger. In May he warned about crypto in the middle of a market sell-off. “We warned against crypto and look at what happened to the crypto market now,” the governor said after the collapse of cryptocurrency terra (LUNA) and stablecoin terrausd (UST).

The RBI has recommended that the Indian government ban cryptocurrency, including bitcoin and ether. However, Indian Finance Minister Nirmala Sitharaman said the ban and regulation could only be efficient with “meaningful” international collaboration.

India still does not have a specific regulatory framework for cryptocurrency. The Indian government has been working on a crypto bill for several years but it has not yet been taken up in parliament. Recently, the Minister of Finance asked crypto investors to exercise caution as authorities investigate a number of crypto exchanges in money laundering investigations.

What do you think of Governor RBI Das’ comments? Let us know in the comments section below.

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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