The Reserve Bank of India (RBI) governor Shaktikanta Das slams cryptocurrencies again, saying there is no underlying value in them and crypto is nothing but gambling.
Speaking at BT’s Banking & Economy Summit, Das said that although cryptocurrency needs to be banned, blockchain technology needs to be fostered due to its wide range of applications.
The RBI governor added, “Every asset, every financial product has to have some underlying (value) but in the case of crypto there is no underlying.”
Das then reiterated his previous call of claiming that crypto lacked the underlying value of even a tulip, and added that “the increase in the market price of cryptos, is based on make-believe.”
“So anything without any underlying, whose valuation is dependent entirely on make-believe, is nothing but 100 percent speculation or to put it very bluntly, it is gambling,” Das stated.
Also Read: RBI Governor Slams Crypto, Calls it “A Threat to Financial Stability”
The RBI governor explained how risky cryptocurrencies are by saying that a year ago the Reserve Bank stated that this whole sector was likely to collapse sooner rather than later.
“And if you see the developments over the last one year, climaxing in the FTX episode, I think I don’t need to add anything more,” Das added.
When asked if the rising digitization of payments poses a threat to the safety and security of banking, Das responded that banks must take precautions to avoid being absorbed by big tech, which now controls the majority of digital transactions.
“Issues of data privacy and issues of robustness of the tech infrastructure of banks have to be the focus of banks. Banks should take their own decisions and not to be allowed to be dominated by big tech,” Das said.
He asserted that CBDCs are the future of money and that their adoption might reduce the cost of printing. Recently, he noted the difference between UPI and CBDC, saying that e-rupee transactions will not have any intermediary, unlike UPI transactions.
