Cryptocurrency Is A Threat To India’s Macro-Economic Stability: RBI Governor Shaktikanta Das

RBI Digital Rupee will be launched in the year 2022-23. We can’t predict a timeline for its release yet, said the governor

RBI Governor Shaktikanta Das said cryptocurrencies will undermine the the central bank's ability to deal with issues of financial stability. Image: Getty

New Delhi: Reserve Bank of India Governor Shaktikanta Das on Thursday issued an alert saying that the cryptocurrencies a threat to macroeconomic and financial stability of the country.

Cautioning investors, Das said cryptocurrencies have no underlying, not even a tulip.

“Cryptocurrencies will undermine the RBI’s ability to deal with issues of financial stability,” he said.

The comments are a reiteration of institutional concerns on such assets expressed earlier but assume significance because they come days after the Union Budget put a 30 per cent tax on gains made on such assets.

The stakeholders of cryptos had welcomed the move as one which legitimises their trade.

In a news meet, the governor said, “RBI Digital Rupee will be launched in the year 2022-23. We can’t predict a timeline for its release yet. There'll be no difference between Digital Rupee and the normal rupee. Cryptocurrency is privately created and it is a threat to financial stability.”

“We can’t give a timeline on Central Bank Digital Currency (CBDC). But what I can say is that whatever we are doing, we are doing it very carefully and cautiously. We have to keep risks like cyber-security and counterfeiting in mind. So, we are proceeding cautiously and can’t give a timeline,” said Shaktikanta Das

RBI Deputy Governor T Rabi Sankar said, “Work on Central Bank Digital Currency is ongoing. Once the law, as proposed, is amended, we can go ahead with our proofs of concept and pilot projects.”

In the morning on Thursday, the Monetary Policy Committee (MPC) of the RBI kept the repo rate unchanged at 4 per cent for the 10th time in a row and continued with ‘accommodative stance’ in the backdrop of an elevated level of inflation.

Making the announcement, Das said that the MPC has also kept the reverse repo rate unchanged at 3.35 per cent while announcing the bi-monthly monetary policy review. The reverse repo rate will continue to earn 3.35 per cent interest for banks for their deposits kept with the RBI, he added.