RBI Deputy Governor cautions against Crypto currencies; says it was developed to bypass government control
Reserve Bank of India Deputy Governor T Rabi Sankar has cautioned investors on cryptocurrencies, stating that crypto-technology is created for the purpose of evading government controls and regulated financial system in a country.
This comes after Union Finance Minister Nirmala Sitharaman said that discussions are on with the RBI on private cryptocurrency and central bank-backed digital currency (CBDC) and a decision will be taken after due deliberations. RBI Deputy Governor said, cryptocurrencies undermine financial integrity, especially the KYC regime and potentially facilitate anti-social activities.
On February 10, RBI Governor Shaktikanta Das had cautioned investors, saying that private cryptocurrencies are a threat to macroeconomic and financial stability. He said that it will undermine the RBI’s ability to deal with challenges.
Finance Minister Nirmala Sitharaman, on February 1, had presented the Union Budget 2022-23 wherein she had announced that the Centre would impose a 30% tax on cryptocurrencies. During the Budget Session, she also introduced the digital currency to be issued by the RBI.