Crypto will ignite the next financial crisis if it's not banned — just look at the FTX fiasco, India's central bank boss says
- FTX's bankruptcy filing shows that crypto is a threat to the global financial system, according to Reserve Bank of India governor Shaktikanta Das.
- Das called for a full ban of the "100% speculative" asset class.
It's time to ban cryptocurrencies before they trigger the next financial crisis, one of the world's top central bankers has warned.
Reserve Bank of India governor Shaktikanta Das said Wednesday that digital assets lack any underlying value – and so they should be banned outright rather than regulated by governments.
"The term 'cryptocurrency' is a fashionable way of describing what is otherwise a 100% speculative activity," he told Business Standard's BFSI Insight Summit.
"Our view is that it should be prohibited because if you try to regulate it and allow it to grow, please mark my words the next financial crisis will come from private cryptocurrencies," Das added. "They have no underlying value. They have huge inherent risks for our macro economic and financial stability."
The RBI has repeatedly called for cryptocurrencies to be banned, rather than regulated by governments.
Das said that this year's brutal 'crypto winter', fueled by rising interest rates and the spectacular implosion of several high-profile companies including major exchange FTX, had reinforced his view that cryptocurrencies need to be banned.
"Countries have been taking different views," he said. "I don't think we need to say anything more about our stand after the developments over the last one year including the latest episode around FTX."
FTX filed for bankruptcy last month after a sell-off in its native FTT token triggered a solvency crisis.
Authorities arrested its disgraced founder Sam Bankman-Fried in the Bahamas last week, and he is currently awaiting extradition to the US on fraud and money laundering charges.
Das's comments come as India assumes its presidency of the G20 – a group of countries including China, Russia, and the US.
India's chief finance minister Nirmala Sitharaman has pledged to make digital asset regulation a major topic of discussion during the country's G20 presidency, which is set to run between now and November 30, 2023.