‘World can’t afford crypto mania, what's good for another market need not be good for us,’ says RBI Guv

Reserve Bank of India (RBI) Governor Shaktikanta Das reiterated at the Mint BFSI Summit and Awards 2024 that the central bank’s stance on cryptocurrencies remains unchanged, warning against their potential for financial instability.

“Traveling down that path will create huge risks. I don’t think the world or emerging markets can take a cryptomania like the Tulipmania,” said the RBI Governor.

“What is good for another market need not be good for us. Therefore our views – both that of the Reserve Bank and personally that of mine – remain the same,” Das said on cryptocurrency regulations.

Das showered praise on private companies for their contribution to India’s UPI payment system dominance.

“The success of UPI in a large measure also owes a lot to the private sector payment players. The private sector companies have had a major role. UPI is perhaps the best in the world and should become a world leader,” he said.

Addressing digital lending, Das expressed satisfaction with the implementation of the RBI’s guidelines. “The fintech sector is thriving and will continue to do so, but sustainable growth is crucial, and that’s our focus,” he emphasized.

In response to the surge of fraudulent lending apps, Das assured that the RBI is collaborating with the government and relevant ministries to implement robust controls against suspicious applications.

The RBI Governor commended the Indian banking sector for its resilience in the face of recent challenges. “The whole of India’s banking sector has emerged stronger from the unprecedented challenges of recent years.…. My short answer to this question is that it is the result of all the good work of various stakeholders in the system,” he said.

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The RBI’s stance on crypto remains cautious, while UPI and the broader fintech sector continue to receive RBI backing for sustainable growth and enhanced fraud prevention measures. The Indian banking sector’s resilience was also lauded for overcoming recent challenges.

(With inputs from agencies)