Reserve Bank Of India Governor Warns of Possible Crypto Market Collapse

Shaktikanta Das, governor of the Reserve Bank of India (RBI), the country's central bank, issued a cautionary statement in an interview with a media agency earlier this week. Das said: “I’m happy that we sounded those warning signals and I would like to believe that a large number of people would have taken a note of the warning signals and the concerns expressed by the Reserve Bank.” Das pointed out that the RBI has previously forewarned investors about the dangers of investing in cryptocurrencies.

“Crypto, you know, we have said it earlier, it can create a lot of financial instability in terms of the ability of the central bank to determine monetary policy,” the RBI governor continued. “It will also have an adverse impact on our exchange rate, on capital flows, on banking sector stability,” he added 

The RBI has suggested that the Indian government ban cryptocurrencies like ether and bitcoin. Nirmala Sitharaman, the  Finance Minister of India, asserted that international cooperation is essential for regulation and prohibition to be successful.

There is presently no clear regulatory framework for cryptocurrencies in India. A crypto law has been in development by the Indian government for a number of years, but parliament has not yet taken it up. The finance minister recently urged cryptocurrency investors to use caution as law enforcement looks into many crypto exchanges as part of money laundering investigations.