RBI Governor: Private Crypto Will Cause Financial Disaster

1. Shaktikanta Das, governor of India’s Reserve Bank, made a public statement.
2. He predicts that private cryptocurrencies will cause the next financial crisis.
3. Das further showed support for CBDCs.

On Wednesday, Shaktikanta Das, governor of India’s Reserve Bank, made a public statement predicting that private cryptocurrencies will cause the next financial disaster. He continued, saying he still thinks it’s a good idea to outlaw cryptocurrency. According to Das, cryptocurrencies don’t have any real value behind them and threaten monetary and economic stability.

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The Governor used the recent arrest of Sam Bankman-Fried, the former CEO of the defunct cryptocurrency exchange FTX, from his penthouse in the Bahamas as an example. United States authorities have formally filed fraud charges against Bankman-Fried on behalf of its equities investment clients.

“After looking at the latest episode of FTX. I don’t think so we need to say anymore,” the RBI governor said at the event. As opposed to other assets or products, private cryptocurrencies “do not have any foundation whatsoever,” Das argues, making them hazardous.

Das went on to say that private cryptocurrencies are distrustful of the regulated financial system because they were designed to function outside of it.

“I am yet to hear any credible argument about what public purpose it serves,” he added.

Das claims that Central Bank Digital Currency (CBDC) allows for the automated “Sweep in, sweep out” of funds from a bank.

“24 hours, you can draw CBDC. And if you are carrying excess CBDC, you can deposit it in the bank,” Das said.

Paper, ink, and printing presses would no longer be “major logistical” expenses for the CBDC. Instantaneous international money transfers are a possibility as a result, he said.

Das went on to explain that the RBI’s monetary policy choices are not entirely dependent on the US Fed’s stance. Domestic growth and inflation dynamics have a significant role in their evolution.

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