Reserve Bank of India governor chief delivered a stark warning against investing in cryptocurrencies, saying they lacked the underlying value of even a tulip – in a reference to a speculative bubble that gripped the Netherlands in the 17th Century.

‘Invest at your own risk’, RBI Guv to crypto investors

RBI Governor Shaktikanta Das made it clear that private cryptocurrencies threaten macroeconomic and financial stability and undermine its ability to deal with challenges on the two fronts. Cautioning investors, the governor said such assets have no underlying whatsoever, “not even a tulip”. The comments come days after the Union Budget put a 30 per cent tax on gains made on such assets.

Governor Shaktikanta Das gave his withering assessment of the digital currency craze just days after the government established a taxation framework for cryptocurrencies.
Advocates who had feared New Delhi might even ban digital currencies took the imposition of a tax as a sign of official acceptance, despite the grave reservations held by the country’s central bank.

“Private cryptocurrency is a huge threat to macro-economic stability and financial stability…investors should keep this in mind that they are investing at their own risk,” Das said in a news conference following a monetary policy meeting.

“And these cryptocurrencies have no underlying (value) – not even a tulip,” he warned.

Sometimes referred to as “tulipmania”, the Dutch tulip bulb market bubble in the 1600s, became a parable of greed.

Having warned that private cryptocurrencies could undermine the RBI‘s ability to maintain financial stability, the central bank has plans to launch its own digital currency sometime next year.

There are an estimated 15 million to 20 million crypto investors in India, with total crypto holdings of around$5.34 billion.

No official data is available on the size of the Indian crypto market


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