RBI Gov. Shakkanta Das issues crypto alert following collapse of Terra’s LUNA, UST

Shaktikanta Das, the governor of the Reserve Bank of India, has stated in an interview that the country’s central bank was right to warn about cryptocurrencies after the collapse of Terra’s UST and LUNA. On May 15, RBI officials warned that most US dollar-denominated cryptocurrencies could see dollarization of the country’s economy. The officials stressed that dollarization violated the country’s sovereign interest while claiming that digital assets posed a threat to India’s financial stability.

CNBC TV18 told CNBC in an interview on Monday that investors would have questioned the law’s effectiveness if crypto had been regulated in India, leading to the recent disaster surrounding the Terra ecosystem. While the Indian government has often said it will not ban crypto entirely, the central bank has called for a ban on multiple occasions.

“That [crypto] is something whose underlying [value] is nothing. There are big questions about how you regulate it. Our position remains very clear, it will seriously undermine India’s monetary, financial and macroeconomic stability,” the governor said.

The RBI governor added that the country’s central bank and government are “unified” in their stance on crypto regulation because the government is “equally concerned.”

“We have communicated our position to the government and they will take a considered call,” he said.

Additionally, Das was questioned about the claim by Coinbase CEO Brian Armstrong. Armstrong claimed Coinbase India disabled payments via the Unified Payments Interface (UPI) just days after launch due to “informal pressure” from RBI.

The governor responded that he would not comment on the hypothetical statements made by outsiders.

As of today, the Indian crypto sector is completely unregulated. The Indian Ministry of Finance conducts meetings with various financial institutions such as the International Monetary Fund, the World Bank, the Reserve Bank of India and the Securities and Exchange Board of India (SEBI). RBI Gov. Shakkanta Das issues crypto alert following collapse of Terra’s LUNA, UST

Ryan Sederquist

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