India’s Central Bank Governor Warns Crypto Market May Crash and Small Investors Will Lose Money – Markets and Prices Bitcoin News

Shaktikanta Das, Governor of RBI has stated that crypto markets could crash and investors who are small will be out of luck. He stated that the central bank thinks that people have been discouraged from investing in crypto currencies by his warnings.

RBI Governor’s Crypto Warnings

In an interview with ET Now, Shaktikanta das, governor of India’s central bank Reserve Bank of India (RBI), warned against investing in cryptocurrency earlier in the week.

Noting that the RBI has cautioned investors on several occasions about the risks of investing in crypto, 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.” He added:

I would like to believe … that many people did not invest in crypto or sort of pulled out of crypto thanks to the cautions and concerns that emanated out of the Reserve Bank.

“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.”

Furthermore, Das cautioned that cryptocurrency has the “potential for being used as a tool for money laundering and for illicit transfer of money.” He also reiterated his earlier statement: “In fact, I said at one point that it doesn’t have any underlying, not even a tulip.”

According to the Indian central bank governor,

Something which doesn’t have an underlying, the prices will not remain high all the time so therefore it may crash, and it has crashed, ultimately … it is the small investors who lose money so therefore it is a big risk for the small investors.

Das warned in July about the danger posed by cryptocurrencies. He warned of crypto during a market crash in May. “We have been cautioning against crypto and look at what has happened to the crypto market now,” the governor said after the collapse of cryptocurrency terra (LUNA) and stablecoin terrausd (UST).

According to the RBI, India should ban cryptocurrency including Bitcoin and Ethereum. However, Indian Finance Minister Nirmala Sitharaman said that both banning and regulation can only be effective with “significant” international collaboration.

India still doesn’t have a specific regulatory framework for cryptocurrency. While the Indian government has worked on a bill to regulate cryptocurrency for years, it is still not being enacted in Parliament. The finance minister recently asked crypto investors for caution, as the authorities are investigating a variety of crypto exchanges.

Comment on comments made by RBI Governor Das. Comment below.

Kevin Helms

Kevin, a student of Austrian Economics and evangelist since 2011, discovered Bitcoin. His main interests are in Bitcoin security, open source systems, network effects, cryptography, and intersections between economics, cryptography, and Cryptography.