Das: Crypto threat to economic stability

New Delhi, February 10

RBI Governor Shaktikanta Das invoked the first financial bubble of the 17th century to caution investors about the risk of investing in cryptocurrencies.

“Private cryptocurrencies or whatever name you call it are a threat to our macroeconomic stability and financial stability. They will undermine RBI’s ability to deal with issues of financial stability and macroeconomic stability,” he cautioned at a media conference.

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Private cryptocurrencies will undermine central bank’s ability to deal with issues of financial and macroeconomic stability. —Shaktikanta Das, RBI Governor

Das said such assets have no underlying value whatsoever, “not even a tulip” in a reference to the 17th century ‘tulip mania’, when prices of this flower rose to dizzy levels and investors who had taken forward positions were wiped out when its inflated price, at times equal to a year’s wages, crashed.

The RBI chief’s warning comes days after the Union Budget had proposed a 30% tax on income from cryptocurrency trading. Welcoming the announcement, the cryptocurrency industry has assumed that it is the first step towards legitimising their trade.