Mumbai (TIP)- The US may have green-lighted exchange-traded funds (ETFs) in bitcoin, but for India’s apex banking regulator, cryptocurrencies remain a strict no-no. “The way we look at crypto remains unchanged, irrespective of who does what,” Reserve Bank of India (RBI) governor Shaktikanta Das stated at the 16th Mint Annual BFSI Summit and Awards in Mumbai on Thursday, January 11. “Just because somebody is doing something, we are not here to emulate them.” The US Securities and Exchange Commission (SEC) on Wednesday approved the first US-listed ETFs to track bitcoin, marking a milestone for the world’s largest cryptocurrency and the broader crypto industry. The SEC approved 11 applications, including from BlackRock, Fidelity and Invesco. At the same time, the SEC said it does not endorse or approve bitcoin.
“RBI’s position on cryptocurrency remains unchanged. Travelling down that path will create huge risks. I don’t think the world or emerging markets (EMs) can take a crypto mania like the tulip mania,” Das said, referring to the 17th century boom and bust in Dutch tulip prices, regarded as one of the most infamous asset bubbles in history.
Delivering the keynote address at the event, Das pointed out that the US regulator itself has flagged the risks of cryptocurrency products. However, he noted that the blockchain technology, on which cryptocurrencies are built, has the potential to lend itself to many applications.
The governor has voiced his concerns on cryptocurrencies several times earlier as well, citing macroeconomic and financial stability risks. In June 2022, Das termed them a “clear danger”, and said anything that derives value based on make-believe, “without any underlying”, is just speculation under a sophisticated name.
The central bank has been focusing on strengthening governance and assurance in regulated entities, Das said. “The key is to identify risks early, monitor them closely and manage them effectively. In this context, instilling an appropriate risk culture in the organisation is important.” This needs to be driven by the board and senior management with effective accountability at all levels, Das said, adding RBI expects top officials and board members to play a more proactive role.
Source: HT