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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MP HC sets up judicial commission to probe water contamination in Indore
Indore (PTI): The Indore bench of Madhya Pradesh High Court on Tuesday set up a commission of inquiry comprising a former HC judge to probe the issue of water contamination in city's Bhagirathpura, saying the matter requires probe by an independent, credible authority and "urgent judicial scrutiny".
It also directed the commission to submit an interim report after four weeks from the date of commencement of proceedings.
A division bench of Justices Vijay Kumar Shukla and Alok Awasthi constituted the commission while hearing several public interest litigations (PILs) filed simultaneously regarding the deaths of several people in Bhagirathpura due to the consumption of contaminated water.
The HC reserved the order after hearing all the parties during the day, and released it late at night.
The state government on Tuesday told the HC that the deaths of 16 people in Indore's Bhagirathpura area was possibly linked to a month-long outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The government presented an audit report of 23 deaths from the current gastroenteritis epidemic in Bhagirathpura before the bench, suggesting that 16 of these fatalities may have been linked to the outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The report, prepared by a committee of five experts from the city's Government Mahatma Gandhi Memorial Medical College, stated that the deaths of four people in Bhagirathpura were unrelated to the outbreak, while no conclusion could be reached regarding the cause of death of three other people in the area.
During the hearing, the high court sought to know from the state government the scientific basis behind its report.
The division bench also expressed surprise at the state government's use of the term "verbal autopsy" in relation to the report, sarcastically stating that it had heard the term for the first time.
The HC expressed concern over the Bhagirathpura case, stating that the situation was "alarming," and noted that cases of people falling ill due to contaminated drinking water have also been reported in Mhow, near Indore.
In its order, the HC said the serious issue concerning contamination of the drinking water supply in Bhagirathpura area allegedly resulted in widespread health hazards to residents, including children and elderly persons.
According to the petitioners and media reports, death toll is about 30 till today, but the report depicts only 16 without any basis or record, it said.
It is averred that sewage mixing, leakage in the pipeline, and failure of civic authorities to maintain potable water standards have led to the outbreak of water-borne diseases. Photographs, medical reports, and complaints submitted to the authorities prima facie indicate a matter requiring urgent judicial scrutiny, the HC said.
"Considering the gravity of the allegation and affecting the right to life under Article 21 of the Constitution of India and the need for an independent fact-finding exercise, the Court is of the opinion that the matter requires investigation by an independent, credible authority," it said.
"Accordingly, we appoint Justice Sushil Kumar Gupta, former judge of the Madhya Pradesh High Court, a one-man commission of inquiry into the issues relating to water contamination in Bhagirathpura, Indore, and its impact on other areas of the city," the HC added.
As per the order, the commission shall inquire into and submit a report on the cause of contamination -- whether the drinking water supplied to Bhagirathpura was contaminated; and the source and nature of contamination (sewage ingress, industrial discharge, pipeline damage etc).
The panel will also probe the number of actual deaths of affected residents on account of contaminated water; find out the nature of disease reported and adequacy of medical response and preventive measures; suggest immediate steps required to ensure safe drinking water as well as long-term infrastructural and monitoring reforms.
It will also identify and fix responsibility upon the officers and officials found prima facie responsible for the Bhagirathpura water contamination incident, and suggest guidelines for compensation to affected residents, particularly vulnerable sections.
The commission shall have powers of a civil court for the purpose of summoning officials and witnesses; calling up records from the government department, hospitals, laboratories and civic bodies; ordering water quality testing through accredited laboratories; conducting spot inspections.
All state authorities involving district administration, Indore Municipal Corporation, public health engineering department and Madhya Pradesh Pollution Control Board shall extend full co-operation and provide records as sought by the commission, it said.
The state government shall provide office space, staff, and logistical support to the commission, it said.
During the hearing in the day, the state government also presented a status report to the court in this matter.
According to reports, a total of 454 patients were admitted to local hospitals during the vomiting and diarrhea outbreak, of whom 441 have been discharged after treatment, and 11 are currently hospitalised.
According to officials, due to a leak in the municipal drinking water pipeline in Bhagirathpura, sewage from a toilet was also mixed in the water.
