RBI Governor warns about crypto in US, calls it the biggest risk

Shaktikanta Das / RBI Governor warns about crypto in US, calls it the biggest risk

Shaktikanta Das - RBI Governor warns about crypto in US, calls it the biggest risk

Shaktikanta Das: At a time when there is a big campaign going on in the US to legalize cryptocurrency and it is getting support from prominent personalities like Donald Trump and Elon Musk, the Reserve Bank of India (RBI) Governor Shaktikanta Das taking a negative stance on it is a big development. This move is particularly important, as in developed countries like the US, cryptocurrency is being seen as a financial innovation, while Shaktikanta Das has described it as a serious threat to the global economy. He has warned not only on the financial risks of cryptocurrency but also on its potential negative effects.

Governor's major concerns about cryptocurrency

Shaktikanta Das described cryptocurrency as a major risk to financial and monetary stability. He stressed that this is likely to cause the Central Bank to lose control over the currency. He believes that if the expansion of cryptocurrency continues like this, the Central Bank may lose control over the money supply in the economy, making it difficult to maintain economic stability in times of crisis. As a result, not only the banking system will be affected, but it will also become difficult to deal with challenges like inflation.

Need for international understanding

Shaktikanta Das called for an international agreement on this issue so that cross-border transactions of cryptocurrencies can be controlled. He says that due to the international nature of cryptocurrencies, global cooperation is necessary to avoid its risks. He said that this opinion may not be popular, but as a guardian of financial stability, this step is highly important for all central banks.

Why is the control of the central bank over the currency necessary?

Shaktikanta Das believes that in times of crisis, it is the responsibility of the central bank to control the money supply. If the spread of cryptocurrencies increases, the central bank may lose its control over the currency, which can increase instability in the economy. Governments and central banks use monetary policies to secure the existing financial structure, which can be disrupted by the uncontrolled spread of cryptocurrencies.

Global concerns about cryptocurrency

This statement of Das has come at a time when central banks around the world are increasingly focusing on the possible negative consequences regarding cryptocurrencies. There is a growing demand for restrictions on it to protect financial stability. He said that governments are also becoming aware of the potential risks of cryptocurrency and are considering controlling it rather than encouraging it.

Difference between the stance of cryptocurrency advocates in America and India

Influential personalities like Donald Trump and Elon Musk in America are openly supporting cryptocurrency, but this statement of Shaktikanta Das reflects India's caution towards crypto. It is an indication that India considers the uncontrolled expansion of cryptocurrency a serious threat to the country's economic stability.

This clear stance of Shaktikanta Das shows that RBI wants to control and limit cryptocurrency rather than adopt it. His views underline the important need for the role of the central bank to provide stability to the global financial system.