Cryptos are nothing but gambling, their value only make-believe: RBI governor Shaktikanta Das
Reserve Bank governor Shaktikanta Das on Friday reiterated his call for an outright ban on cryptocurrencies, saying these are “nothing but gambling” and their perceived “value is nothing but make-believe.''
To further its opposition to such currencies and also to take a lead over other central banks, the RBI recently launched its own digital currency (central bank digital currency), in the form of e–rupee on a pilot mode, first for the wholesale in late last October and a month later for retail customers.
Speaking at a Business Today event this evening here, Das reiterated the need for an outright ban on cryptos saying though those supporting it call it an asset or a financial product, there is no underlying value in it not even a tulip (alluding to the Dutch tulip mania blow-up in the early part of the past century).
“Every asset, every financial product has to have some underlying (value) but in the case of crypto there is no underlying… not even a tulip…and the increase in the market price of cryptos, is based on make-believe. So anything without any underlying, whose value is dependent entirely on make-believe, is nothing but 100 per cent speculation or to put it very bluntly, it is gambling,” the governor said.
“Since we don't allow gambling in our country, and if you want to allow gambling, treat it as gambling and lay down the rules for gambling. But crypto is not a financial product,” Das asserted.
Warning that legalizing cryptos will lead to more dollarization of the economy, he said cryptos masquerading as a financial product or financial asset, is a completely misplaced argument.
Explaining it, he said the bigger macro reason for banning them is that cryptos have the potential to and the characteristics of becoming a means of exchange; an exchange of doing a transaction.
Since most cryptos are dollar-denominated, and if you allow it to grow, assume a situation where say 20 per cent of transactions in an economy are taking place through cryptos issued by private companies.
Central banks will lose control over that 20 per cent of the money supply in the economy and their ability to decide on monetary policy and to decide on liquidity levels. Central banks' authority to that extent will get undermined, it will lead to a dollarization of the economy.
“Please believe me, these are not empty alarm signals. One year ago in the Reserve Bank, we had said this whole thing is likely to collapse sooner than later. And if you see the developments over the last year, climaxing in the FTX episode, I think I don't need to add anything more,” Das said.
To a question whether he sees any threat to the safety and security of banking from the increased digitization of payments, Das said banks have to ensure that they are not swallowed by big tech which today control most digital transactions.
“Issues of data privacy and issues of robustness of the tech infrastructure of banks have to be the focus of banks. Since many banks are actively engaged with many big tech, their challenge is to ensure that this should not lead to a situation where banks are swallowed up by the big tech. Banks should take their own decisions and not to be allowed to be dominated by big tech,” Das said.
On the CBDC being piloted now, he said central banks issued digital currencies are the future of money and its adoption can help save on logistic and printing costs.
“I think CBDC is the future of money,” the governor said, adding “since lots of central banks are doing/working on it and we cannot be left behind but at the same time we have to ensure that its technology is robust and very safe and ensure that it's not cloned or counterfeited.”
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UP: Misled by GPS navigation, car falls into river from partially constructed bridge, 3 dead
Bareilly (UP), Nov 24: Three people died when their car fell into the Ramganga river from a partially constructed bridge here on Sunday, police said, adding that they suspect the driver was misled by its navigation system into taking the unsafe route.
The accident occurred around 10 am on the Khalpur-Dataganj road when the victims were travelling from Bareilly to Dataganj in the Badaun district, they said.
"Earlier this year, floods had caused the front portion of the bridge to collapse into the river, but this change had not been updated in the system," Circle Officer Ashutosh Shivam said.
The driver was using a navigation system and did not realise that the bridge was unsafe, driving the car off the damaged section, the police said.
There were no safety barriers or warning signs on the approach to the damaged bridge, leading to the fatal accident, Shivam said.
Upon receiving information, police teams from Faridpur, Bareilly and Dataganj police station rushed to the spot. They recovered the vehicle and the bodies from the river, Shivam added.
The circle officer said that bodies had been sent for post-mortem. Further investigation into the matter is underway.
— Bareilly Police (@bareillypolice) November 24, 2024
