India’s stance on cryptocurrencies has not always been much accommodative, and Reserve bank of India governor Shaktikanta Das on Monday, May 23, made it clear once again. The RBI governor said that the central bank had for long been cautioning against cryptocurrency, and it has now crashed.
Shaktikanta Das said people would have raised questions after the cryptocurrency market crash had the RBI been regulating the digital assets by now. “We have been cautioning against crypto and look at what has happened to the crypto market now. Had we been regulating it already, then people would have raised questions about what happened to regulations," Das told CNBC TV18 in an exclusive interview — his first after a mid cycle repo rate hike.
“This is something whose underlying (value) is nothing. There are big questions on how do you regulate it. Our position remains very clear, it will seriously undermine the monetary, financial and macroeconomic stability of India," the RBI Governor added.
Recently, the global cryptocurrency market has seen a huge downturn with the world’s largest cryptocurrency Bitcoin shedding its value to trade at $27,000 earlier this month. This was a cut of more than 50 per cent of its all-time high of $69,000. Bitcoin has since remained flat and has not traded above the $30,000 mark in days.
Shaktiknta Das also said that he believes that that the Centre seems to be in sync with the central bank’s stance on cryptocurrencies that they have no underlying value. The RBI has for quite some time said that cryptocurrencies have no underlying value, with the governor saying that they compare to ‘not even a tulip’.
“We have conveyed our position to the government and they will take a considered call. I think the utterances and statements coming out from the government are more or less in sync. They are also equally concerned," Das said.
“I would not like to react on speculative observations made by individuals outside," Shaktikanta Das said on being asked about US crypto exchange Coinbase’s CEO Brian Armstrong’s comments. Armstrong had recently said during the company’s earnings call that Coinbase had to disable Unified Payments Interface (UPI) on its platform due to ‘informal pressure from the RBI’, days after its mega launch in India.
However, according to reports, the RBI has not imposed any shadowban on crypto exchanges. In its initial days, when Bitcoin was slowly making its mark in India, the RBI had planned to ban cryptocurrencies in India. However, a Supreme Court order in 2018 had overturned its ban on cryptocurrencies, and since then the RBI has maintained a tight stand on digital assets. It has repeatedly flagged the impact of cryptocurrencies on the macroeconomy in India.
The government has also been reluctant in totally accepting cryptocurrencies.
In the Union Budget presented earlier this year, Finance Minister Nirmala Sitharaman proposed a 30 per cent tax on trading in cryptocurrencies and related assets, with 1 per cent deducted at source (TDS) when such transactions occur.
