India Central Bank Governor: Crypto Is 'Big Threat' to Financial Stability

The governor of the Reserve Bank of India, Shaktikanta Das, said on Thursday that private cryptocurrency “is a big threat to our macroeconomic stability and financial stability.”

Das added that cryptocurrency investors should “keep in mind that cryptocurrency has no underlying value—not even a tulip.” 

The governor’s comments come a week after the country’s finance minister Nirmala Sitharaman announced a 30% tax on crypto income with no exemptions or deductions. 

According to the new legislation, investors filing their tax returns won’t be able to show losses due to price crashes or theft in order to offset the tax on their profits. 

India's CBDC plans

Sitharaman also announced that the Reserve Bank of India (RBI) will introduce a blockchain-based central bank digital currency (CBDC), which will take the form of a digital rupee, within the next financial year. 

On Thursday, Das reaffirmed the RBI’s commitment to the digital rupee, but failed to provide further details on when the rollout will happen. 

“We are making progress on CBDCs after carefully, cautiously examining it because there are risks,” he said. “The biggest risk is of cybersecurity and possibility of counterfeiting. We should absolutely prevent that.”

In 2018, the Reserve Bank of India (RBI) issued a ban on banks dealing with crypto. It was overturned in March this year by the supreme court, but the RBI insisted that it still has major concerns about crypto. 

Das has long taken a skeptical stance on cryptocurrency, describing it in 2021 as a “major” concern that could impact on the nation’s financial stability.