At the recent World Economic Forum in Davos, Shaktikanta Das, Governor of the Reserve Bank of India (RBI), reiterated his concerns about the risks associated with cryptocurrencies. In his address, he highlighted the potential impact of cryptocurrencies on financial stability, currency stability, and the monetary system, particularly for emerging market economies.
Das also expressed skepticism about the approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC), emphasizing the significant risks associated with these assets. He cautioned against viewing the approval as a signal for a cryptocurrency party, pointing to the volatility, money laundering, and terror financing risks that are inherent in these assets.
The governor’s warnings are consistent with his long-standing stance on cryptocurrency, as he has been a vocal critic of bitcoin and other digital assets. In fact, he has previously advocated for a complete ban on cryptocurrencies in India, emphasizing the potential loss of control over the money supply and the undermining of the authority of the RBI.
Das’s comments serve as a reminder of the regulatory challenges and concerns surrounding the adoption and use of cryptocurrencies, particularly in emerging market economies like India. As the crypto industry continues to evolve, it is increasingly important for regulators and central banks to carefully consider the potential risks and implications of these digital assets on their respective financial systems.
