RBI chief says cryptos a threat to macroeconomy, refers to 17thC ‘tulip mania’

By, New Delhi
Feb 10, 2022 03:59 PM IST

RBI governor Shaktikanta Das said it was his “duty” to caution investors and urged them to keep in mind that they are investing at their own risk.

Reserve Bank of India (RBI) governor Shaktikanta Das on Thursday said private cryptocurrencies were a threat to macroeconomy and financial stability, and would undermine the central bank’s ability to deal with challenges on the two fronts.

RBI governor Shaktikanta Das.(File photo)
RBI governor Shaktikanta Das.(File photo)

In a message for investors, Das said such assets have no underlying whatsoever, “not even a tulip”.

We're now on WhatsApp. Click to join.

In the Union Budget presented on February 1, finance minister Nirmala Sitharaman announced a 30 per cent tax on gains made on such assets, besides stating that the RBI will start issuing the country’s first digital currency in 2023.

Also read | Repo rate, reverse repo rate remain unchanged, real GDP growth projected at 7.8%

Das, who presented the first monetary policy statement after the Union Budget 2022-23, said, “Private cryptocurrencies or whatever name you call it are a threat to our macroeconomic stability and financial stability. They will undermine the RBI's ability to deal with issues of financial stability and macroeconomic stability.”

Stating that it was his “duty” to caution investors, the RBI governor urged them to keep in mind that they are investing at their own risk.

Das said, “They also need to keep in mind that the cryptocurrency has no underlying, not even a tulip”. Das was referring to the 'tulip mania' of the 17th Century that is often cited as a classic example of a financial bubble, where the price of something goes up, not due to their intrinsic value but because of speculators wanting to make a profit by selling a bulb of the exotic flower.

(With inputs from agencies)

"Exciting news! Hindustan Times is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest news!" Click here!
Story Saved
Live Score
Saved Articles
My Reads
My Offers
Sign out
New Delhi 0C
Wednesday, October 04, 2023
Start 14 Days Free Trial Subscribe Now
Register Free and get Exciting Deals