Shaktikanta Das, governor of the Reserve Bank of India (RBI), spoke bluntly about the cryptocurrency industry at a recent conference and said that "private" crypto will be the cause of the subsequent financial crisis.
On Dec. 21, Das stated that private cryptocurrencies—those that are not issued by banks or governments—are unbacked by anything and are only meant to be used for speculation. Das was speaking at the Business Standard BFSI Insight Summit.
They have no intrinsic worth. They carry significant inherent hazards to the stability of our economy and finances. I haven't heard a convincing explanation regarding what public good or purpose it serves yet," he claimed.
Das continued by saying that the wisest course of action moving ahead in India would be to completely ban crypto:
"Private cryptocurrency trade is wholly speculative, and I continue to believe that it should be outlawed because, if allowed to expand, if you try to control it and allow it to expand, please mark my words, private cryptocurrencies will be the source of the next financial disaster."
The recently-extradited Sam Bankman Fried-led collapse of FTX was cited by the RBI head as an illustration of this risk.
After the events of the past year, particularly the most recent instance involving FTX, he added, "I don't think we need to say anything more about our stand.
With numerous U.S. senators in particular using the opportunity to criticize digital assets over the past few weeks, these remarks indicate yet another instance in which a prominent figure in politics or finance has blamed the crypto sector for FTX's fall.
Das, of course, talked far more favorably of digital currencies issued by central banks, highlighting the RBI's active efforts to launch the digital rupee.
India has been in the vanguard of the digital revolution in the current century, he said, and you will see more central banks adopting digital currencies in the days to come.
The RBI has frequently questioned the value of cryptocurrencies and has historically maintained a chilly attitude toward them. Das' most recent remarks demonstrate that the situation is only growing worse because, as recently as June, the bank had rated the industry at the bottom of its list of systemic concerns.