Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday termed cryptocurrencies as "clear danger" and mentioned that anything that derives value based on make believe, without any underlying, is just speculation under a sophisticated name.
The government is in the process of finalising a consultation paper on cryptocurrencies after collecting inputs from various stakeholders and institutions. The RBI has been flagging concerns about cryptocurrencies, which are witnessed as a highly speculative asset. In the foreword to the 25th issue of the Financial Stability Report released on Thursday, the Governor also said that as the financial system gets increasingly digitalised, cyber risks are increasing and need special attention.
"We must be wary of of the emerging risks on the horizon. Cryptocurrencies are a clear danger. Anything that derives value based on make believe, without any underlying, is just speculation under a sophisticated name," the Governor said.
Announcing the bi-monthly monetary policy result in February, the Governor had cautioned investors by invoking the 17th century 'tulip mania', which is largely treated to be the first “financial bubble”. Das said that investors must recollect that cryptocurrencies have no underlying, not even a tulip.