Cryptocurrencies are threat to macroeconomic and financial stability, warns RBI governor

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Photo source: PTI (file)

To make a point about the value of such instruments using a historical context, Das said, They also need to keep in mind that cryptocurrency has no inherent, not even tulip.

RBI Governor Shaktikant Das on Thursday clarified that individual cryptocurrencies pose a threat to macroeconomic and financial stability and weaken the ability to deal with challenges on two fronts.

Warning investors, the governor said there is nothing inherent in such a national asset, not even a tulip. The comments, which were made earlier, reiterate the institutional concerns over such assets but conceive of significance as they come just days after the central budget imposed a 30 per cent tax on such assets.

Crypto stakeholders have welcomed the move, which would legitimize their trade. Private cryptocurrency or whatever you call it is a threat to our macroeconomic stability and financial stability. They will weaken the RBI’s ability to address issues of financial stability and macroeconomic stability, Das told reporters.

He added that it was his duty to warn investors, and to remind them that they were investing at their own risk. To make a point on the value of such instruments using a historical context, Das said, they also need to keep in mind that cryptocurrencies have no inherent, not even a tulip.

It is worth noting that the 17th century Tulip Mania is often cited as a classic example of the financial bubble, where the price of something goes up, not because of the internal price but because speculators want to make a profit by selling it. A bulb of exotic flowers.

Also read | India imposes 30% tax on income from cryptocurrency, digital assets; 1% TDS on purchase / sale

Also read | Cryptocurrency has some financial stability issues: Chief Economic Adviser

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