The governor of the Reserve Bank of India called cryptocurrencies dangerous and risky instruments due to their high volatility and speculative nature.
Shaktikanta Das warned traders and investors about the collapse of the Terra project and the ongoing downturn in the cryptocurrency market, during which investors lost millions of dollars.
“You should always be aware of the risks that appear on the horizon. Cryptocurrencies are a clear danger. Anything that gains value based on someone’s belief and without any basis is considered to be ordinary speculation. And cryptocurrencies are sophisticated frauds, ”said the RBI manager.
The official acknowledged that the latest technologies increase access to the financial sector, and their benefits must be used to the fullest. However, along with the rapid pace of digitalization of the financial system, cyber risks are also growing, which requires special attention. It is important to prevent cryptocurrencies from disrupting financial stability, Das worries:
“Cryptocurrencies are privately created and pose a threat to the financial sector and macroeconomic stability. Investors should remember that they act at their own peril and risk. The value of cryptocurrencies is not supported by anything.”
Recently, the Securities and Exchange Board of India (SEBI) raised concerns about the difficulty of regulating cryptocurrencies due to their decentralized nature. According to the regulator, this increases the likelihood of illegal transactions.
The Reserve Bank of India believes that the launch of the digital rupee will help refocus the attention of users from cryptocurrencies to the state stablecoin. The Central Bank is assessing the possible risks of the digital rupee so that it does not have a negative impact on commercial banks.
Source: Bits
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