Indian Central bank chief warns of crypto risks
During a talk at the Peterson Institute for International Economics’ Macro Week 2024, Das emphasised that cryptocurrencies pose challenges to traditional financial systems, as they are privately issued and could operate beyond central bank oversight.
India’s Central Bank Governor, Shaktikanta Das, has voiced strong concerns about the impact of cryptocurrencies on financial stability, reiterating his cautious stance during a recent talk at the Peterson Institute for International Economics’ Macro Week 2024. Das highlighted that cryptocurrencies were originally designed to sidestep traditional financial systems, posing questions about whether governments are prepared to accept privately issued digital currencies with monetary attributes.
Das argued that issuing currency has always been a sovereign role, warning that allowing cryptocurrencies to operate could lead to sections of the economy moving beyond central bank oversight. This shift could destabilise monetary policy, as it would hinder the central bank’s control over money supply, a critical tool for managing inflation and economic cycles.
He further stressed that widespread crypto use could disrupt the existing financial system, potentially leading to chaos as banks lose their control over liquidity. Das’s comments underline India’s scepticism towards cryptocurrency, advocating for careful consideration of the long-term implications on economic stability.
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