New Delhi: Reserve Bank of India (RBI) Governor Shaktikanta Das has cautioned investors on cryptocurrencies stating that they should invest in the same at their own risk.
Das said it is his “duty” to caution investors, and told them to keep in mind that they are investing at their own risk.
He also added that cryptos are a threat to macroeconomic and financial stability while comparing it with the historical ‘tulip mania’ which was widely considered to be the first financial bubble. He said that the cryptocurrencies do not even possess the value of the exotic flower. (Also read: Crypto tax regime in India: Does taxation on Crypto make it legal? Explained)
“Private cryptocurrencies or whatever name you call it are a threat to our macroeconomic stability and financial stability. They will undermine RBI’s ability to deal with issues of financial stability and macroeconomic stability,” Das added. (Also read: Zee Exclusive: How will tax on virtual digital asset impact Crypto investors? CoinSwitch CEO answers)
The ‘tulip mania’ of the 17th century is often cited as a classic example of a financial bubble where the price of something goes up, not due to its intrinsic value but because of speculators wanting to make a profit by selling a bulb of the exotic flower.
In the Union Budget for 2022-23 presented in Parliament on February 1, the government proposed levying a 30 per cent tax on gains made on cryptocurrency trades by investors and the announcement was welcomed by cryptocurrency industry players, saying it legitimises their trades.