RBI chief warns against investing in cryptocurrencies

Private cryptocurrencies pose a ‘great threat’ to macroeconomic and financial stability, and investors should recognise all risks. This was stated by Shaktikanta Das, head of the Reserve Bank of India (RBI), according to Reuters.

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In his view, private digital assets could undermine the RBI’s ability to maintain financial stability. The executive stated that cryptocurrencies have no value, referencing ‘tulip mania’.

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“Investors must remember that they are investing at their own risk,” Das emphasised.

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In 2018, the renowned cryptographer and pioneer in smart contracts Nick Szabo called the popular cliché used by some experts and analysts to describe Bitcoin a ‘bubble’ or ‘tulip mania’.

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Later among them was Guggenheim Partners’ investment chief Scott Minerd. In May 2021 he called cryptocurrencies a bubble, comparing the market situation to ‘tulip mania’.

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The RBI chief’s statement came after Finance Minister Nirmala Sitharaman announced plans for the authorities to introduce a 30% tax on income from digital asset transactions in the run-up to the launch of the CBDC.

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Earlier ForkLog reported that the RBI may conduct pilot tests of the digital rupee in the first quarter of fiscal 2022.

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Earlier in 2021, India reportedly considered a legislative ban on cryptocurrencies, including criminal liability for holders.

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In mid-year there were reports that authorities legalise digital currencies as an asset class.

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However in November there was renewed talk of the government’s intention to ban most ‘private currencies’. This sparked panic in the local market, causing a short-term local dip in Bitcoin’s price by 15%.

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In December, the media reported that authorities would still regulate digital assets rather than ban them.

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