Business & Economy

India’s central bank terms cryptocurrencies a ‘threat’

New Delhi, Feb 10 (EFE).- The Reserve Bank of India on Thursday said cryptocurrencies were a “threat” for the financial stability of the country, a week after the government announced 30 percent taxes on profits made on digital currency investments and the establishment of a digital rupee based on the blockchain technology.

“As far as cryptocurrencies is concerned, the RBI stance is very clear. Private cryptocurrencies are a big threat to our financial and macroeconomic stability,” Shaktikanta Das, the RBI governor, said in a press conference.

Das, who has expressed his mistrust of digital currencies such as bitcoin and ethereum for years, said that these would “undermine RBI’s ability to deal with issues related to financial stability.”

The governor said that investors investing in cryptocurrencies should do it “at their own risk.”

“They should keep in mind that these cryptocurrencies have no underlying (asset). Not even a tulip,” he said.

The comments come after the Indian government last week announced that it would create a digital currency based on the blockchain technology and impose 30 percent taxes on income generated by the trading of virtual currency assets, such as cryptocurrencies and NFTs.

The future Indian digital currency would follow the norms established by the RBI and would have the same value as that of the real rupee, Finance Minister Nirmala Sitharaman had told the parliament.

In this regard, Das said that the RBI and the government were working cautiously, keeping in mind cybersecurity and risks of duplication etc, without announcing a launch date for the official digital currency.

In 2019, the government had sought to present a draft law to ban the use of digital currencies that carried prison sentences of up to 10 years for the possession, use or production of cryptocurrencies, after a committee established by the finance ministry recommended such a ban.

However, in May 2020, the Supreme Court of India termed the RBI’s ban on cryptocurrency as illegal and urged the government to regulate this grey area in Indian legislation. .

The Indian government is preparing a bill on cryptocurrencies whose details are still unknown. EFE


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