RBI Governor Shaktikanta Das sounds an alarm on cryptocurrencies

The Reserve Bank of India's (RBI) Governor Shaktikanta Das said on Wednesday that India's ostensible demand and publicized interest in cryptocurrencies are likely exaggerated, and possibly a marketing ploy to attract more people to a novel asset class unapproved by the regulator. Das also reiterated his concerns about cryptocurrencies, adding that the government is actively considering the regulator's recommendations.

In terms of the amount that has been invested, it is definitely growing, and we hear so many things anecdotally, Das said in an interview with a financial publication. "However, I am not convinced by the figures mentioned. Because, based on the information we have, I can say with a reasonable degree of certainty that the number of participants in the crypto market appears to be exaggerated." The vast majority of investors (roughly 70 percent or more) have put in between Rs1,000 and Rs3,000. Das speculated that there may be an effort to enroll as many people as possible. The RBI governor also expressed his concern about the potential for financial instability as a result of such investments and stated that the government was actively considering his recommendations.

Meanwhile, RBI Governor praised the government for lowering excise duties on gasoline and diesel, claiming that the move addressed several supply-side constraints that were causing inflation. Inflation is expected to be 5.3 percent in FY22, according to the RBI.

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