The road for the crypto industry in India just doesn't seem to get any smoother.?
If the heavy crypto tax and other related announcements during Budget 2022 weren't enough of a setback for the crypto industry, the RBI governor has come up to drop more bombshells.
Yesterday (10th Feb 2022), after sharing the Monetary Policy Committee outcome, RBI governor Shaktikanta Das spoke to the media. In his first statement after the crypto tax announcement about ten days back, the RBI governor spoke against crypto and warned investors against it.
Das said, ¡°Cryptocurrency is a threat to India¡¯s macroeconomic stability and investors betting on it are doing it at their own risk. ¡°
He further stated that as far as cryptocurrencies are concerned, the RBI stance is very clear.?
As per the RBI governor, private cryptocurrencies are a big threat to our financial and macroeconomic stability. They will undermine RBI's ability to deal with issues related to financial stability.
Also Read:?Crypto-assets Can Increase Financial Inclusion, Says Infosys' Nandan Nilekani
Comparing cryptocurrency to tulips, Das said, ¡°I think it is my duty to tell investors that what they are investing in cryptocurrencies, they should keep in mind that they are investing at their own risk." The governor further went on to say that crypto investors should keep in mind that these cryptocurrencies have no underlying (asset). Not even a tulip.?
This statement saying crypto has no underlying value, not even equal to a tulip, has become the talk of the town since yesterday, with many people wondering why the RBI governor particularly mentioned Tulips.
This can probably be the reference he tried to make.?The growing popularity of cryptocurrencies is often equated with the ¡®Tulip Mania¡¯ which had gripped parts of Europe, especially Holland, back in the 17th century, and had apparently ultimately ended in a huge crash.?
To give you a brief about it, the Tulip mania was a period during the Dutch Golden Age when contract prices for some bulbs of the (then) recently introduced and ¡®fashionable¡¯ tulip had reached extraordinarily high levels. Although this brought a major acceleration starting in the year 1634, the prices dramatically collapsed in February 1637.
Also Read:?Crypto Will Collapse One Day, Says Rakesh Jhunjhunwala
Also Read:?Meet The Dutch 'Bitcoin Family' Who Emigrated To 'Bitcoin Heaven' Portugal For Tax-Free Crypto
The RBI governor cautioned crypto investors and said there was immense risk involved in it.
But despite RBI¡¯s repeated warnings over the recent past, investors have perhaps continued to invest in crypto, with the craze seeming to get higher and higher.?
Even the government's recent move to tax crypto hasn't gone well with the RBI, with yesterday¡¯s statements seeming to be a clear message to the government as well, that it needs to be careful while recognizing crypto and letting investors put their hard-earned money in them.
With the RBI¡¯s concerns that crypto-assets can be used for illegal activities and muddy transactions, just making crypto taxable doesn¡¯t reduce the crypto risk.
Also Read:?Countries Where Cryptocurrency Is Currently Banned
For more such interesting content and the latest financial news,?keep reading Worth.?Click here