RBI Governor Warns on Crypto After Terra LUNA and UST Crash

With the collapse of cryptocurrency Terra (LUNA) and stablecoin UST, India’s central bank, the Reserve Bank of India (RBI), has issued a warning against investing in the cryptocurrency market. Governor Shaktikanta Das said: "We have been warning about cryptocurrencies and are concerned about what is happening in the crypto market at the moment."

Reserve Bank of India (RBI) Governor Shaktikanta Das discussed the downturn in the crypto market and the regulation of crypto assets in an interview with CNBC TV18 on Monday.

“We have always warned about cryptocurrencies and are following what is currently happening in the crypto market,” the Governor emphasized:

"If we've regulated it, people will question what's going on with the regulation."

The crypto market has lost more than $1.5 trillion since November and nearly $500 billion since the beginning of this month. The market rout was exacerbated by losses in cryptocurrency Terra (LUNA) and algorithmic stablecoin TerraUSD (UST).

Referring to cryptocurrencies, Das said: “It’s something that basically has zero [value].” He added:

"How to regulate it is a big question. Our position remains very clear that this will seriously destabilize India's monetary, financial and macroeconomic stability."

The RBI also recently warned that cryptocurrencies could lead to dollarization of the Indian economy.

According to the governor, the Indian government and the central bank have the same stance on cryptocurrencies. “We’ve communicated our position to the government and they’re going to take it seriously,” he said. “I think the voices and statements from the government are more or less in sync. They’re equally concerned.”

Das was also asked about a statement by cryptocurrency exchange Coinbase CEO Brian Armstrong, who claimed that Coinbase India banned Unified Payments Interface (UPI) payments a few days after its launch due to "informal pressure" from the RBI. .

"I don't want to react to speculative observations by outside individuals," the governor replied.

The Indian government has been working on cryptocurrency legislation for some time. Treasury officials have been consulting with the International Monetary Fund (IMF) and World Bank on cryptocurrency regulation. India’s finance minister, Nirmala Sitharaman, said in April that decisions on cryptocurrency regulation would not be rushed.

Meanwhile, India, which currently imposes a 30 percent tax on cryptocurrency income, will introduce a 1 percent tax deduction at source (TDS) on cryptocurrency transactions in July.

Source: Bitcoin.com

https://news.bitcoin.com/indias-central-bank-governor-warns-about-crypto-after-collapse-of-terra-luna-ust/