RBI Governor on Crypto | ‘How will you regulate it, whom will you regulate, what will you regulate?’
Reserve Bank of India (RBI) Governor Shaktikanta Das on Tuesday (October 31) said cryptocurrencies are a serious threat to financial stability for all countries, especially for emerging market economies.
The RBI governor’s message centred on the necessity to view cryptocurrencies within the context of macroeconomic stability. “Cryptocurrencies present a serious financial stability risk that must be properly addressed,” he said, while speaking at an event.
“How will you regulate it, whom will you regulate, and what will you regulate?” he asked those tasked with regulating this burgeoning industry. He referred to a recent International Monetary Fund (IMF) paper, which acknowledged the need for countries to consider imposing additional restrictions on cryptocurrencies as and when required.
Das also expressed his scepticism about the larger purpose served by cryptocurrencies. He asserted, “I have yet to come across any credible explanation of what larger purpose cryptocurrencies serve.” In the same vein, he questioned, “What can cryptos do that central bank digital currencies (CBDCs) cannot do?” The implication being that governments and central banks worldwide may not be entirely comfortable with the idea of private currencies.
He made it clear that these fundamental issues need to be comprehensively understood before embarking on any regulatory framework for cryptocurrencies. He said, “The whole issue has to be carefully addressed.” He assured the audience that the RBI’s intent is not to stifle innovation, rather, “all innovations must be supported and promoted if they serve a public good,” he said.
(Edited by : Shoma Bhattacharjee)
