India’s Central Bank Governor Warns Against Crypto After Terra LUNA, UST Collapse

India’s central bank, the Reserve Bank of India (RBI), has warned against investing in the crypto market following the collapse of the cryptocurrency terra (LUNA) and stablecoin terrausd (UST). “We warned against crypto and look at what happened to the crypto market now,” Governor Shaktikanta Das said.

RBI Governor on the Crypto Market and Regulation

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

“We warned against crypto and look at what happened to the crypto market now,” the governor said, noting:

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If we had already regulated it, then people would have asked questions about what happened to the regulation.

The crypto market has lost over $1.5 trillion since November last year and nearly $500 billion since the start of the month. The market drop was exacerbated by the fall of the cryptocurrency terra (LUNA) and the stablecoin algorithm terrausd (UST).

Describing cryptocurrency, Das said, “It’s something whose underlying (value) is nothing.” He added:

There are big questions about how to regulate it. Our position remains very clear, this will seriously damage India’s monetary, financial and macroeconomic stability.

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

The governor believes that the Indian government shares the central bank’s position on crypto. “We have communicated our position to the government and they will take a considered call,” noted the central bank chief. “I think government statements and statements are more or less in sync. They are also affected.

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

“I would not like to react to speculative observations made by outside individuals,” replied the governor.

The Indian government has been working on cryptocurrency legislation for some time. Finance Ministry officials consulted with the International Monetary Fund (IMF) and the World Bank on crypto regulation. Indian Finance Minister Nirmala Sitharaman said in April that the decision on crypto regulation would not be rushed.

Meanwhile, cryptocurrency income is currently taxed at 30% in India, and a 1% withholding tax (TDS) will start being levied on crypto transactions in July.

Keywords in this story

crypto market crash, crypto market downturn, crypto regulation, cryptocurrency regulation, LUNA, RBI, rbi bitcoin, rbi crypto, rbi cryptocurrency, Shaktikanta Das, Terra, upi, UST

What do you think of the RBI Governor’s comments? Let us know in the comments section below.

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Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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India’s Central Bank Governor Warns Against Crypto After Terra LUNA, UST Collapse


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