Cryptocurrencies Are Clear Danger, Says Shaktikanta Das The RBI governor highlighted the growth of cyber risk along with the digitalization of financial system
By Teena Jose
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Shaktikanta Das, Reserve Bank of India (RBI) governor, reiterating the long-held stance on cryptocurrencies, in the 25th issue of RBI's financial stability report, said that cryptocurrencies are a clear danger. He said, "We must be mindful of the emerging risks on the horizon. Cryptocurrencies are a clear danger. Anything that derives value based on make-believe, without any underlying, is just speculation under a sophisticated name." The report also said the aggressive tightening of monetary policy in response to the inflationary pressure on the cryptocurrency ecosystem.
While mentioning about the digitalization of financial system, he pointed out the emerging cyber risks also. "While technology has supported the reach of the financial sector and its benefits must be fully harnessed, its potential to disrupt financial stability has to be guarded against. As the financial system gets increasingly digitalized, cyber risks are growing and need special attention. Our endeavor is to face all challenges, external and internal, with strength and innovative solutions for the Indian financial system," Das said in a statement.
According to his words, "A noteworthy feature of the current situation is the overall resilience of Indian financial institutions, which would stand the economy in good stead as it strengthens it prospects. This reflects a combination of good governance and risk management practices."
As per the financial stability report, the government is in the process of finalizing a consultation paper on cryptocurrencies. It also emphasized the importance of constantly monitoring stable coins. It stated that, "The risks from stablecoins that claim to maintain a stable value against existing fiat currencies require close monitoring in particular, they are akin to money market funds and face similar redemption risks and investor runs because they are backed by assets that can lose value or become illiquid in times of market stress."
As per reports available regarding the 1 per cent TDS on the transfer of the virtual digital assets, the TDS rule will come in force from July 1st for transaction of more 10,000. The rule comes after the imposition of 30 per cent flat income tax on cryptocurrencies from 1st April.
