The governor of India’s central bank, the Reserve Bank of India (RBI), says the “ongoing US banking crisis” clearly demonstrates the risks cryptocurrencies pose to the financial system. The central bank chief added that “the Indian economy remains resilient,” stressing that “the worst of inflation is behind us.”
Indian Central Bank Governor on Crypto Risks and US Banking Crisis
The governor of India’s central bank, the Reserve Bank of India (RBI), warned of the risks cryptocurrencies pose to the financial system while commenting on the US banking turmoil at the 17th KP Memorial Conference Hormis on Friday. RBI Governor Shaktikanta Das said:
The current US banking crisis highlights the importance of strong regulators, sustainable growth and clearly shows the risks of private cryptocurrencies for the financial system.
Das was referring to the recent collapses of several banks in the US. Last Sunday, the New York State Department of Financial Services seized Signature Bank, while regulators shut down Silicon Valley Bank last Friday. They became the second and third largest banks in the US to fail. Additionally, Silvergate Bank announced voluntary liquidation earlier this month.
Some people believe that the regulatory actions against crypto banks are related to cryptocurrencies, including Senator Elizabeth Warren (D-MA), who blamed Signature Bank’s failure on its acceptance of crypto clients without sufficient collateral. However, regulators have insisted that their actions have nothing to do with cryptocurrencies.
The Indian central bank governor stressed that the US banking crisis shows the “need for prudent asset and liability management.” Furthermore, Das said:
The Indian economy remains resilient. The worst of inflation is behind us.
Das, who was named Governor of the Year for the 2023 Central Banking Awards on Wednesday, has repeatedly warned about crypto risks. According to the head of India’s central bank, cryptocurrencies not only pose a major threat to India’s macroeconomic and financial stability, but also severely undermine the RBI’s ability to determine monetary policy and regulate the country’s monetary system.
What do you think of the statements by RBI Governor Shaktikanta Das? Let us know in the comments section.
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