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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Five teachers suspended for facilitating mass copying during Class 12 exam in Beed
Beed (PTI): Five teachers, who were caught allegedly facilitating large-scale copying during an HSC (Class 12) examination paper at a centre in Maharashtra's Beed district, have been suspended, an official said on Tuesday.
The police had registered a first information report (FIR) against 17 teachers after a drone camera exposed large-scale copying on February 10, the first day of the Class 12 exams conducted by the Maharashtra State Board of Secondary and Higher Secondary Education, at Centre 224 in Chousala.
Drone-mounted surveillance cameras deployed by the authorities captured supervisors in 16 examination halls, not only failing to prevent copying but also allegedly helping students cheat openly.
The official said five teachers from Bhalchandra Vidyalaya in Limbaganesh have been suspended in connection with the malpractice, and 12 from three other schools and junior colleges are under investigation and may face suspension as the probe widens.
After learning about the February 10 incident, Beed Collector Vivek Johnson ordered strict action against those responsible for the lapse.
Accordingly, an FIR was registered against 17 teachers, including the chief conductor of the exam centre, at Neknoor police station and charges under the Maharashtra Universities, Boards and Other Specified Examinations (Prevention of Malpractices) Act and Bharatiya Nyaya Sanhita were invoked.
The Education Department subsequently directed the concerned institutions to suspend the implicated staff.
