The Reserve Bank of India’s timely warning to investors to be wary of digital assets has yielded results, central bank governor Shaktikanta Das said.
In an interview with local media ET Now, Das said he was delighted with the outcome of the RBI’s warnings of risks in the digital asset market. The notice influences many investors not to invest or pull out of the market.
“I’m glad we sounded those warning signs. “Anecdotally, I’m aware that a lot of people haven’t invested in crypto or they’ve kind of pulled out of crypto thanks to the caution and the concern that has come from the Reserve Bank,” Das said.
The governor also reiterated the RBI’s long-standing position that India’s best course of action to protect investors would be to ban digital assets in the country.
The central bank has issued several warnings since its July financial stability report, which described digital assets as an emerging threat to the country’s financial system due to their high volatility, borderlessness and lack of regulation.
The bank also warned that digital assets could dollarise the Indian economy because the market is mainly denominated in US dollars and issued by foreign entities.
The RBI’s solution for the distribution of digital assets
The RBI has a long history of opposing the digital asset market. In 2018, it restricted traditional banks from providing services to firms in the sector. The directive was overturned by the Supreme Court in 2020. However, banks continued to treat the industry with uncertainty.
Some digital asset firms have claimed that the country still maintains a strong shadow ban on the industry. According to Brian Armstrong, the Chief Executive Officer of Coinbase (NASDAQ: COIN), which had to end its operations in the country after the National Payments Corporation of India de-platformed it from the UPI system, the country lacks regulatory clarity for digital assets not. .
Meanwhile, the RBI has supported central bank digital currencies to replace digital currencies. T. Rabi Sankar, the deputy governor of the RBI, told an International Monetary Fund panel that a CBDC could eclipse the currently revolutionary use cases and benefits that blockchains and digital assets have.
Watch: The BSV Global Blockchain Convention Presentation, CBDCs and BSV
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