India presently holds the G-20 presidency, giving the country the authority to set the agenda for debates pertaining to international crypto rule-making.
The next financial catastrophe would be caused by “private cryptocurrencies,” according to India’s central bank governor Shaktikanta Das, if they are let to be regulated rather than outright outlawed. Das spoke on Wednesday at the Business Standard BFSI Insight Summit.
“Our view is that it should be prohibited because if you try to regulate it and allow it to grow, please mark my words the next financial crisis will come from private cryptocurrencies,” Das said.
“They have no underlying value. They have huge inherent risks for our macro economic and financial stability. I am yet to hear any credible argument about what public good or what public purpose it serves.”
The phrase “private cryptocurrencies” is being used to distinguish between a public cryptocurrency like India’s CBDC and cryptocurrencies like bitcoin and ether, which are issued by private parties.
“I think the term private cryptocurrency is a fashionable way of describing what is otherwise a 100% speculative activity and there is a talk that it should be regulated,” Das added.
The governor of the Reserve Bank of India (RBI) has previously said that cryptocurrencies ought to banned. These remarks have relevance at a time when the country is in the G-20 presidency, which gives it the authority to set the agenda.
How to regulate cryptocurrency assets, according to India’s Finance Minister Nirmala Sitharaman, should be a top concern on the global stage and would be a major discussion point during its G-20 presidency.
The G-20 meetings in India over the past several days have seen the presentation of many nations’ perspectives on how to regulate the space, and sources claim that the RBI has been represented by a group of more than 20 persons.
“Countries have been taking different views,” said Das. “I don’t think we need to say anything more about our stand after the developments over the last one year including the latest episode around FTX.”
The governor’s remarks also come as the RBI works to raise awareness of its CBDC, the e-rupee or digital rupee, and faces inquiries about whether CBDCs compete with private cryptocurrencies.
When asked if India’s CBDC was a “optic to fight crypto,” Das responded that it wasn’t a matter of being afraid of missing out or of providing competition to a private cryptocurrency. Instead, he believes that the world will advance thanks to CBDC.
India has led the digital revolution in the twenty-first century, he continued, and that in the future, more central banks will accept digital currencies, and Previously, Das said that the Indian central bank’s warnings caused people to steer clear of cryptocurrencies.