India’s central bank, the Reserve Bank of India (RBI), has warned about investing in the crypto market following the collapse of cryptocurrency terra (LUNA) and stablecoin terrausd (UST). “We have been cautioning against crypto and look at what has happened to the crypto market now,” said Governor Shaktikanta Das.
RBI’s Governor on Crypto Market and Regulation
Shaktikanta Das (Gouvernor of the Reserve Bank of India) discussed Monday’s crypto market decline and regulation in an interview on CNBC TV18.
“We have been cautioning against crypto and look at what has happened to the crypto market now,” the governor said, stressing:
It would have been illegal to regulate it if we hadn’t.
Since November 2017, the crypto market lost over $1.5 trillion and nearly $500 billion, respectively. This market crash was further exacerbated due to the collapse of cryptocurrency Terra (LUNA) as well as algorithmic stablecoin Terreusd (UST).
Describing cryptocurrency, Das said: “This is something whose underlying (value) is nothing.” He added:
It is not clear how to regulate it. It will severely undermine India’s monetary, financial, and macroeconomic stability, our position is clear.
Recently, the RBI warned that cryptocurrency could result in the dollarization Indian economy.
The governor believes that the Indian government shares the central bank’s stance on crypto. “We have conveyed our position to the government and they will take a considered call,” the central bank chief noted. “I think the utterances and statements coming out from the government are more or less in sync. They are also equally concerned.”
Das was also asked about the statement made by Brian Armstrong, the CEO of cryptocurrency exchange Coinbase, who claimed that Coinbase India disabled payments by the Unified Payments Interface (UPI) days after launch due to “informal pressure” from the RBI.
“I would not like to react on speculative observations made by individuals outside,” the governor replied.
Since a long time, the Indian government has been working to develop cryptocurrency legislation. Officials from the Finance Ministry have been working with World Bank and the International Monetary Fund on cryptocurrency regulation. Indian Finance Minister Nirmala Sitharaman stated in April that no decision regarding crypto regulation would be made quickly.
In India, crypto income is taxed at 30%. A 1% tax will be deducted at source in July.
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