A day after US regulators approved bitcoin Exchange Traded Funds (ETFs), RBI Governor Shaktikanta Das declared on Thursday that the central bank does not “emulate” others when it comes to rules and that the bank’s and his objections to cryptocurrencies remain unaltered. Additionally, he stated that the world and developing markets cannot afford to experience a “crypto mania.” He furthermore added that what works well for one market might not work well for another. As such, neither the Reserve Bank’s nor his own opinions have changed.
Speaking at a financial sector seminar hosted by the business daily Mint, the head of the Reserve Bank of India (RBI) also stated that moving towards cryptocurrency will result in significant risks for both advanced and emerging market economies, which will be extremely challenging to control in the future. In response to a question regarding the state of cryptocurrency development in the US, Das posed the following. “I want to know why you want to go that route. What exactly are you going to receive?” Private cryptocurrencies are opposed by Das personally and the RBI as an organization because they seriously jeopardize the stability of the financial system.
“In the same notice, the US financial markets regulator also cautioned investors to exercise caution and warned them of the risks involved. Regardless of who takes what action, our position, my position, and the RBI’s position on this matter are all unchanged. We are not here to imitate someone just because they have done something,” he remarked. The remarks came in the context of the US regulator SEC approving bitcoin ETFs. The ETF structure provides financial advisors and institutions with a regulated and familiar means of gaining exposure to bitcoins, therefore the approval is considered a significant step towards the mainstreaming of cryptocurrencies in finance.
“I don’t wish to comment on what a regulator of another country has done; they know what is best for their country. But I would like to say that they themselves have flagged risks in the product and advised people to be very careful. “We are all familiar with the Tulip mania in the Netherlands that had led to an asset bubble in the past. I don’t think emerging markets and the world can afford a crypto mania that could lead to similar outcomes,” the governor said.
When asked if he thought the next vote on the account would cause inflation, Das replied that based on the current government’s track record, he didn’t think the interim budget would.