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| India’s Central Bank Governor Highlights Risks of Crypto to Financial System |
The governor of India’s central bank, the Reserve Bank of India (RBI), has once again cautioned about the risks cryptocurrencies pose to the financial system. Speaking at a lecture on Friday, RBI Governor Shaktikanta Das said that the recent U.S. banking crisis highlights the need for robust regulators, sustainable growth, and the risks of private cryptocurrencies to the financial system.
Das referred to the recent collapses of several banks in the U.S., including Signature Bank and Silicon Valley Bank. While some believe that regulatory actions against crypto-friendly banks are related to cryptocurrency, regulators have insisted that their actions have nothing to do with crypto.
The Indian central bank governor has repeatedly warned about crypto risks, saying that cryptocurrency poses a significant threat to India’s macroeconomic and financial stability. Das emphasized that crypto also seriously undermines the RBI’s capacity to determine monetary policy and regulate the country’s monetary system.
Furthermore, Das stressed the need for prudent asset liability management in light of the U.S. banking crisis. Despite these risks, however, Das emphasized that the Indian economy remains resilient and that the worst of inflation is behind the country.
The comments by the RBI governor come as India’s government prepares to introduce a bill to regulate cryptocurrencies. The bill seeks to ban all private cryptocurrencies and create a framework for the creation of a digital rupee. The move has been met with criticism from some in the crypto community, who argue that it could stifle innovation and harm India’s tech sector.
While India has been slow to embrace cryptocurrencies, the country has seen a surge in interest in digital assets in recent years. This has led to a rise in crypto trading volumes and the emergence of several crypto startups in the country.
As the debate over the regulation of cryptocurrencies continues in India and around the world, it remains to be seen how governments and central banks will address the risks posed by these digital assets to the financial system.
