reserve Bank of India Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that cryptocurrencies pose a huge risk to financial stability and monetary stability. He stressed that this could lead to a situation where the central bank would lose control over the money supply in the economy. “I believe this is something that should not be allowed to dominate the financial system,” Das said. This poses a huge risk to financial stability. This poses a huge risk to monetary stability. It also poses a risk to the banking system.
Due to this, a crisis may arise
It could also create a situation where the central bank would lose control over the money supply in the economy, he said at the Peterson Institute for International Economics, a leading think-tank. Das said that if the central bank loses control over the money supply in the economy, then how will the cash available in the system be checked. He further said that in times of crisis, the central bank controls inflation by controlling the money supply.
There should be international understanding on this
Therefore, we view crypto as a bigger risk. In response to a question, he said that there should be an international understanding on this, because it involves cross-border transactions. The RBI Governor said, “One should be fully aware of the major risks associated with cryptocurrencies. I think this should not be encouraged. This opinion is not very popular, but I think it is a big concern for central banks around the world as guardians of financial stability.” Das said governments are also concerned about the potential downside risks in cryptocurrencies. Are becoming increasingly aware.
