The Reserve Bank of India (RBI) termed cryptocurrency as a 'clear threat' and said that if the value of something is made only on the basis of an asset, then it is only betting with a good name. The central government is preparing a consultation paper on cryptocurrency. For this, inputs have been taken from various stakeholders and institutions. The crypto market has been declining for the last few months and this has caused a big loss to the investors.
RBI has also expressed apprehensions about cryptocurrency. RBI Governor Shaktikanta Das said in the Financial Stability Report (FSR) that with the more digitalized financial system, the cyber risk is also increasing and it needs to be noted. He said, "Cryptocurrency is a clear danger". If the value of anything is only on faith without the basis of an asset, then it is betting."
The decline in cryptocurrency has weakened the financial condition of many firms in this segment and has to take measures like trimming to reduce their cost.
The RBI issued a circular about four years ago about cryptocurrency and prohibited the dealing in such instruments on the entities under its regulations. However, about two years ago, the Supreme Court rejected this circular of RBI.
The regulatory status regarding cryptocurrency in the country is not clear. Inputs are also being taken from the World Bank and International Monetary Fund (IMF) for the consultation paper being prepared by the government on the cryptocurrency.
In FSR, Das has also said that technology has increased the reach of the financial sector and should take full advantage of it, but at the same time there is a need to pay attention to the risk of weakening financial stability.
Regarding the economy, Das said that global developments and geopolitical stresses are affecting it. The country's financial system is strong to face these tremors. Das said, "Our effort is to face external and internal challenges with strength and innovative solutions."
An important feature of this situation is that due to the strength of the country's financial system, the economy will be good and opportunities will increase for this. It is showing good governance and better risk management.
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