Cryptocurrencies have no underlying value: RBI governor

The Reserve Bank of India (RBI) has yet again warned investors about the risks posed by private cryptocurrencies. Private cryptocurrencies, according to RBI governor Shaktikanta Das, are a danger to macroeconomic and financial stability, and individuals who are investing at their own risk should be aware of the hazards.

Also Read| RBI monetary policy: Sensex, Nifty gain after reserve bank holds rates

“Private cryptocurrencies or whatever name you call them are a threat to our macroeconomic stability and financial stability. They will undermine the RBI’s ability to deal with issues of financial stability and macroeconomic stability,” Das told reporters.

Also Read| RBI monetary policy meet: Key highlights

Cautioning investors, the governor said such assets have no underlying value whatsoever, “not even a tulip”.

Previously, the Union Budget suggested a 30% tax on virtual digital assets such as Bitcoin and Ethereum.

Also Read| Inflation to peak this quarter, policy support to continue: Shaktikanta Das

Furthermore, the buyer bears withholding tax at the rate of 1% on payments made for the acquisition of such assets. Gains or losses on the sale of virtual assets will not be allowed to be offset against other gains or losses. That is, it will be considered as a separate asset type.

Also Read| RBI monetary policy: Cap on e-Rupee to be increased from Rs 10,000 to Rs 1 lakh

During her budget presentation, Finance Minister Nirmala Sitharaman also stated that the RBI will establish its own digital currency.

According to industry estimates, India has 15 million to 20 million crypto investors, with total crypto holdings of roughly Rs 40,000 crore ($5.37 billion). There are no official statistics on the size of the Indian crypto market.

Also Read| RBI monetary policy: Repo rate unchanged, GDP projected to grow at 7.8%

According to an October analysis from Chainalysis, an industry research organisation, the crypto market in India gained 641% in the year to June 2021.

Also Read| Trending Stocks: Nykaa, Tata Power, BSE, Power Grid and others in news today

Earlier in the day, the RBI left the benchmark interest rate or repo rate – the rate at which banks borrow from the central bank – constant at 4% for the tenth time in a row and opted to maintain an accommodative stance.

The RBI also forecast 7.8% economic growth in India for the fiscal year 2022-23. The current fiscal year’s growth projection remains at 9.2%