RBI Governor Raises Doubt Over Cryptocurrency Market Value, Says 'Investors Look Exaggerated'

RBI Governor Shaktikanta Das said that cryptocurrencies being unregulated by any central banks or authorities is a serious threat to any financial system.

New Delhi: Reiterating opposition, Governor of the Reserve Bank of India, Shaktikanta Das on Wednesday said that cryptocurrencies pose a serious threat to the financial stability in the country, reported PTI. The Governor also raised doubts on the reports suggesting the number of crypto users and the market value claimed by them. 

Shaktikanta Das said that cryptocurrencies being unregulated by any central bank or authorities is a serious threat to any financial system. “Cryptocurrencies are a serious concern to RBI from a macroeconomic and financial stability standpoint. The government is actively looking at the issue and will decide on it. But as the central banker, we have serious concerns about it and we have flagged it many times,” Das said at an event.

Expressing his doubts over the number of cryptocurrency investors and their claimed market value, Das said, "I am not sure about the veracity of such numbers as these virtual currencies are not controlled by RBI or any other central bank. But I still think the number of investors look clearly exaggerated as bulk of them, say over 70%, have invested only about Rs 1,000 each in cryptocurrencies."  

The RBI had issued a circular banning cryptocurrencies in the country. The circular was nullified by the Supreme Court in 2020. A year later in February 2021, the central bank constituted an internal panel to come up with a model of the central bank’s digital currency. The report of the panel is expected to come by next month. 

While the RBI Governor raised doubts over the reports claiming the number of crypto investors in India, a recent report by broker discovery and comparison platform, BrokerChooser in its report said that India has the highest number of crypto investors in the world.

According to its report, India currently has 10.07 crore crypto owners in the world. The report also stated that in terms of percentage of crypto owners out of the total population of that country, India stood fifth at 7.30%. 

The central bank had intended to come up with an official digital currency. Earlier this year the Central Government had planned to table a bill in parliament banning trade of all private cryptocurrencies in the country. The Bill has not been tabled in the parliament yet.