Crypto will cause 'next financial crisis' and should be banned, RBI says

Quick Take

  • The Reserve Bank of India’s governor shared his belief that private cryptocurrencies would lead to the “next financial crisis” and should be banned.
  • At the same time, Shaktikanta Das remains optimistic regarding central bank digital currencies and the RBI’s plans for a digital rupee.

The Reserve Bank of India's governor, Shaktikanta Das, said private cryptocurrencies would lead to the "next financial crisis" if allowed to continue — and should therefore be banned.

Das reiterated that the RBI believes private cryptocurrencies should be prohibited. "Please, mark my words, the next financial crisis will come from private cryptocurrencies,” Das said at the Business Standard BFSI Insight Summit on Wednesday. “They have no underlying value. They have huge inherent risks for our macroeconomic and financial stability. I am yet to hear any credible argument about what public good or what public purpose it serves."

The central bank's governor pointed to collapsed crypto exchange FTX, specifically, as an example for why cryptocurrencies should be prohibited.

“After all the developments over the last year, including the latest episode on FTX, I don’t think we need to say anything more about our stance," Das said.

At the same time, Das remains positive regarding central bank digital currencies and the RBI's plans for a digital rupee, stating: "You will see in days to come more and more central banks will embrace digital currencies and India has been in the forefront of the digital revolution in the current century."

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

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