Shaktikanta Das of the Reserve Bank of India (RBI) has issued a warning against cryptocurrencies, warning investors about the possible dangers of the digital money.
Cryptocurrencies are a major source of concern in terms of macroeconomic and financial stability, according to Das.
Shaktikanta Das’s remarks come at a time when the crypto frenzy is still raging among Indian investors, particularly retail investors.
The mania in India has risen at a frenetic rate after the Supreme Court rejected the RBI’s judgement, thus lifting the restriction on cryptocurrency trading in India.
The union government has not yet passed a cryptocurrency law and is consulting industry experts as well as receiving input from various officials and ministers.
In the wider public interest, the government may wish to impose strict controls on cryptocurrency trading in India after numerous rounds of caution.
Bitcoin and ether prices fell Wednesday after leaping to new highs on Tuesday, as both virtual digital currencies pulled back from their previous highs. Both have gained about 70% against the dollar since the beginning of October, having more than doubled since June.
The world’s most valuable cryptocurrency by market capitalization was down 1% at $67,089. The digital asset market, which has been around for a little more than a decade, has nearly doubled in value since its year-end value in 2020. Year-to-date, Bitcoin has increased by almost 131 percent (YTD).
According to Bloomberg News, the total value of all cryptocurrency holdings has just surpassed $3 trillion.
Shaktikanta Das, speaking about the state of the Indian economy, said that despite the uncertainty, he sees a very good future for India’s growth.
Shaktikanta Das went on to say that interest rate market evolution appears to be pretty orderly, and that appropriate foreign reserves will provide a cushion to deal with volatility.
On the investment front, Das believes that there are signs of an uptick in investment, and that demand for bank loans would increase from next year onwards.
The RBI governor went on to say that global geopolitical tensions are bringing new problems, and that they must be monitored.