The governor of India’s central bank (RBI), Shaktikanta Das, reiterated that cryptocurrencies are a ‘clear danger’ to the financial systems and said that it has the potential to disrupt financial stability. In the RBI’s annual Financial Stability Report (FSR) 2022, released on Thursday (June 30), the governor wrote in the foreword that anything that derives value based on ‘make-believe’ without any underlying is just speculation under a sophisticated name. “We must be mindful of the emerging risks on the horizon. Cryptocurrencies are a clear danger… While technology has supported the reach of the financial sector and its benefits must be fully harnessed, its potential to disrupt financial stability has to be guarded against,” Das wrote in the Financial Stability Report. The report also noted that cryptocurrencies pose risks and are “designed to bypass the financial system and all its controls, including Anti Money Laundering (AML)/Combatting the Financial Terrorism (CFT) and Know Your Customer (KYC) regulations.” According to the governor, cryptocurrencies can erode capital account regulation for developing countries, which can weaken exchange rate management. “Furthermore, cryptocurrencies can lead to disintermediation from the formal financial system, impairing financial stability,” he added. RBI Governor Remains Apprehensive On Crypto The RBI governor has consistently warned against cryptocurrency investments and has freque...
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