India’s central bank chief warns cryptocurrency will cause next financial crisis if allowed to grow • TechCrunch

On Wednesday, the Governor of India’s Central Bank stated that he is not at War with Cryptocurrencies. However, he stressed that cryptocurrencies do not have underlying fundamentals and should be banned.

Shaktikanta das, Governor of Reserve Bank of India, stated to a room of lawmakers and bank executives that cryptocurrency presents significant risks for the stability of the economy and the nation’s overall economy. “After the development of the past year, including the recent episode about FTX, I don’t think we need to say anything else. Time has proven that cryptocurrency is worth what it is today.”

“The change in value in any so-called product is a function of the market. Our main concern about cryptocurrency, unlike any other asset or product is its lack of basis. I think cryptocurrency or private cryptocurrency is a fashionable way of describing what is Otherwise 100% speculative activity,” Das said.

Das stated that cryptocurrency’s origin is the idea that it can bypass or break the existing financial system. They don’t believe there is a central bank and they don’t believe there is a regulated financial system. I have yet to hear a good argument about what general purpose it serves,” he said, adding that he takes the view that cryptocurrencies should be banned.

“They should be banned because if they are allowed to grow… say they are regulated and allowed to grow… Please limit my word that the next financial crisis will come from private cryptocurrencies,” he said.

India is one of those countries that has taken a tough stance on cryptocurrency. It started taxing virtual currency earlier in the year. A 30% tax on winningsEvery crypto transaction receives a 1% discount

The country’s move has combined with the market downturn severely drained local transactions at the CoinSwitch Kuber exchange, backed By Sequoia India, Andreessen Horowitz, as well as CoinDCX, backed in part by Pantera.

Changpeng “CZ” Zhao, founder and CEO of the world’s largest cryptocurrency exchange Binance, told TechCrunch in a recent interview that the company You don’t see India as a “very crypto-friendly environment”.He stated that the company is trying communicate its concerns to the local authority regarding local taxes but stressed that it can take a while for tax policies to change.

“Binance goes to countries where the regulations are pro-cryptocurrency and pro-business. We don’t go to countries where we won’t have a sustainable business — or any business, regardless of whether we go or not.

Coinbase, which backed CoinDCX and CoinSwitch Kuber, launched its crypto platform in the country earlier in the year. Quickly undo the serviceamid organizational panic. Brian Armstrong, Coinbase CEO and co-founder, stated in May that Coinbase had stopped supporting local payments under UPI because of “some” reasons. informal pressure from [central bank] Reserve Bank of India. “

“Crypto closed out 2021 with a narrative that finance as we know it was slow, inefficient, and cluttered. Divi and DAOs were the best way forward. The cryptocurrency market was, in its own terms, going insane and investors were HODLing. The luster of cryptocurrencies has diminished by two-thirds since May 2022. The failure of some entities caused the collapse of the ecosystem, ”T. Rabih Sankar (Deputy Governor of Reserve Bank of India) He likened cryptography to a tulip and Ponzi schemeWed.

“A technology heralded as the end of government, regulators and intermediaries – the core philosophy of cryptocurrency – is now frantically seeking to be regulated,” he said.