The head of the central bank of India saw cryptocurrencies as a threat to the country’s economy

The leadership of the Reserve Bank of India (RBI) assures that the country’s authorities share the regulator’s concern about the threat posed by the crypto industry.

RBI Governor Shaktikanta Das said the central bank is warning investors against investing in digital currencies due to recent market developments. This refers to the collapse of the stablecoin TerraUSD (UST) and the cryptocurrency Terra (LUNA), said in interview for CNBC head of RBI. According to Shaktikanth Das, the bank is currently monitoring the market to understand the root causes of the collapse and lay down clear rules for Indian investors:

“If what happened was in our area of ​​​​responsibility, then people would already have questions about our competence. Therefore, we urge investors to refrain from acquiring digital currencies for a while until we understand what is happening in the cryptocurrency markets.”

The value of cryptocurrencies is practically not supported by anything, the head of the RBI assures. Cryptocurrencies have the potential to undermine India’s monetary, financial and macroeconomic stability, and their continued proliferation, Das says, could lead to the dollarization of the Indian economy.

The official is convinced that the Indian authorities share the regulator’s position regarding cryptocurrencies, as the RBI has made its opinion clear about the crypto industry. The Indian government is concerned about the situation, says Das, and is actively working on digital currency legislation.

Earlier, Ashish Singhal, CEO of cryptocurrency exchange CoinSwitch, said that the uncertainty with the regulation of cryptocurrencies in India is greatly slowing down the development of the industry in the country.