The governor of India's Central Bank, Shaktikanta Das mentioned the risks related to cryptos in an interview with CNBC-TV18. Pointing to the fall of crypto prices, Das said that Indian regulators have been cautioning against the sector previously.
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Recently, prices of cryptocurrencies dropped essentially, and a popular crypto project Terra LUNA crashed, which was unexpected for many investors. Terra’s algorithmic stablecoin UST lost its peg and couldn’t recover. Das finds that if there was already a regulatory framework, people would have asked what happened to regulators.
Further, the official added that there is no underlying value for cryptocurrency, and there are big questions on how to regulate the market. Das announced that the position of the Central Bank remains clear and it is that crypto will seriously weaken the monetary, financial, and macroeconomic stability of India.
Earlier, the institution warned that crypto could lead to the dollarization of the economy, as prices are determined by dollar.
Shaktikanta Das believes that the Indian government shares the concerns. The Bank has told about its position to the government and expects that they will take a considered call.
Indian authorities have been working on the crypto legislature grounds for a while. However, in March the Indian Parliament passed a crypto taxation law, according to which crypto income is taxed 30% in India. In addition, a 1% tax deducted at source (TDS) will start imposing on crypto transactions in July.