Cryptos will trigger next financial crisis: RBI Guv

Co-Ordinated Approach

- RBI, govt jointly working to check inflation

- Indian financial sector remains resilient

- Undertaken several supply side measures like cutting down taxes on fuels

New Delhi: As millions of investors face uncertainty in global crypto meltdown, the Reserve Bank of India (RBI) Governor Shaktikanta Das said on Wednesday that the next financial crisis will come from crypto collapse if private digital coins are allowed to grow.

Addressing a group of banking sector leaders and lawmakers at the BFSI Insight Summit 2022 organised by a media outlet, Das emphasised that cryptocurrencies have no 'underlying value' and pose great risks for global macroeconomic and financial stability. After the development of the last one year, including the latest episode surrounding FTX, I don't think we need to say anything more."

"Crypto or private cryptocurrency is a fashionable way of describing what is otherwise a 100 per cent speculative activity," he added.

On inflationary pressures, Das said there is a "very coordinated approach" between the Union government and the central bank to fight inflation. He further said the government is "equally serious" about taming inflation.

The remarks came weeks after the RBI wrote a note to the government explaining the reasons for missing the upper end of the tolerance band on inflation set for it for nine consecutive months, which is a first since the onset of the flexible inflation targeting framework in 2016. It may be recalled here that after the collapse of crypto exchange FTX, US authorities have arrested its former CEO San Bankman-Fried in the Bahamas and officially charged him with defrauding equity investors.

Cryptocurrencies have no 'underlying value' and pose great risks for global macroeconomic and financial stability. After the development of the last one year, including the latest episode surrounding FTX, I don't think we need to say anything more

- Shaktikanta Das