Crypto may spur next financial crisis: RBI head

Bloomberg

Reserve Bank of India (RBI) Governor Shaktikanta Das warned that failing to regulate cryptocurrencies could ignite the next financial crisis and urged the adoption of a new
e-Rupee for digital banking needs.
“Cryptocurrency has certain huge inherent risks for our macroeconomic and financial stability,” Das said at an event in Mumbai, pointing to the implosion of FTX as an example. “If cryptos grow, mark my words, the next financial crisis will come.” Das said a main concern for the RBI is that cryptocurrencies don’t have any underlying value. “It is a 100% speculative activity,” he added.
Das’s comments come in light of the global cryptocurrency meltdown that led to billions of dollars being wiped out. India’s central bank has refused to recognise private cryptocurrencies and repeatedly issued warnings against trading in them.
Globally, more central banks will embrace digital currencies as they shun private cryptocurrencies, Das said. India’s central bank tested its own digital
currency for retail usage earlier this month.
Speaking at the Business Standard BFSI Insight Summit, Das said it’s in everyone’s interest to cool high prices in the economy, and that the government and central bank are
“serious about controlling inflation.” He said monetary policy isn’t driven by politics or upcoming national elections, which are scheduled for 2024. Instead, the RBI is “only looking at inflation and growth.”