This is for the second time Indian central bank authorities have reported negative remarks for the cryptocurrencies and believes they are a danger. While explaining the 25th Financial Stability Report (FSR) by Reserve Bank of India’s (RBI), Shaktikanta Das, RBI Governor requests the national government to produce a strategic layout to handle the upcoming threats from the virtual asset universe.
Emphasizing the things he has been saying till now on crypto assets, he commented that ‘values driven by the make-believe phenomenon are just speculations.’ “Anything that derives value based on make-believe, without any underlying, is just speculation under a sophisticated name. 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,” he said.
The FSR linked Bitcoin and the altcoins to money market capitalization and declared that when the market turns bearish, they run redemption risks when there are chances that the prices of cryptocurrencies supporting them may go down or become difficult while cash conversion.
As per the recent report, various down points of the crypto-asset industry were marked and their connection to the regulated financial body was mentioned. “One of its early ramifications is reflected in the crypto ecosystem with one stablecoin losing almost all its value and another de-pegging from the US dollar, underscoring the need for regulatory guardrails to ensure financial stability and consumer and investor protection,” the report read.
According to the RBI data, it was seen that cryptocurrencies consist of barely 0.4% of financial property worldwide. Regardless of the fact that presently the threats are quite low, it reported, “However, the associated risks are likely to grow as these assets and the ecosystem supporting their growth are evolving.”
Gargi Sinha is working as Senior Journalist at Confea. She has completed her Masters in Journalism from Delhi University. She has interest in crypto and blockchain technology.