Last Updated: 17 January 2023
A Reserve Bank of India governor shared a striking opinion on bitcoin last week. He sees drawbacks and especially dangers in the growing demand for cryptocurrencies in his country.
Indian central banker
Shaktikanta Das spoke at the Business Today Banking and Economy Summit about the Indian economy. According to him, cryptocurrencies should be banned:
“It has no underlying value in the market. Like any asset, every financial product has an underlying value. The value of crypto currencies is entirely based on the appearance factor.”
“Crypto is a form of gambling (…) and is nothing but a 100 per cent speculation.”
But even more remarkable is the following statement:
“Cryptocurrencies have the potential to become a means of payment and most of it is denominated in dollars. Imagine if you let it grow, that it comprises 20 per cent of the economy, then the central bank will lose authority over the money.”
There Das has the cow by the horns: although he refers to private companies as owners and issuers of cryptocurrencies, this is exactly the idea of bitcoin: money without a central bank. Money belongs to no one and therefore money belongs to everyone (with a node and/or private key).
According to Das, this in turn is precisely a danger: it undermines the ability to pump liquidity into the economy and the monetary policy that he sees as necessary.
India is worried they “will lose control over the money supply” in the country due to assets like #Bitcoin
“This can happen” – 🇮🇳 Central Bank Governor
— The Bitcoin Conference (@TheBitcoinConf) January 15, 2023
India’s annual budget is due soon. There seems to be little hope for a windfall for the crypto industry. Indian crypto companies have already had a difficult period anyway with many legal setbacks.