In a recent statement at Mint's BFSI Summit, Reserve Bank of India (RBI) Governor Shaktikanta Das reiterated the central bank's cautious stance on cryptocurrencies, emphasizing the potential risks associated with their proliferation. Governor Das expressed concerns about the global and emerging markets grappling with a crypto mania akin to the historic Tulip mania.
Last year, Governor Das maintained the RBI's unwavering position on banning crypto assets, labeling them as a "serious threat to financial stability, particularly for emerging markets." During the summit, he questioned the feasibility of regulating the cryptocurrency industry, citing the need for clear regulations and expressing skepticism about the task of regulating a rapidly evolving sector.
Referencing a recent International Monetary Fund (IMF) paper, Governor Das pointed out the IMF's acknowledgment of the necessity for countries to consider imposing additional restrictions on cryptocurrencies. This underscores the global concern surrounding the potential implications of unregulated digital currencies.
Despite these reservations, Governor Das commended private companies for their role in making India a leader in the UPI payment system. He highlighted the acceptance of digital lending guidelines and the growth of the fintech sector, emphasizing the importance of sustainable growth in this rapidly evolving landscape.
He acknowledged the challenges posed by cyber threats to the robustness of IT systems and reaffirmed the RBI's commitment to strengthening India's banking and financial systems.
In a notable move, Governor Das also unveiled the RBI's plan for a Central Bank Digital Currency (CBDC) during the Mint BFSI Summit. While outlining the expansion of wholesale CBDC, he emphasized exploring programmable features in retail CBDC to enable senders to define specific end uses. This announcement aligns with the global trend of central banks exploring the potential of digital currencies.
As the world navigates the evolving landscape of digital finance, Governor Das's remarks shed light on the RBI's cautious approach to cryptocurrencies and its commitment to fostering a secure and sustainable financial ecosystem.