India’s Central Bank Issues a Warning Against Investing in Cryptos

India’s central bank, the Reserve Bank of India (RBI), has issued a warning to its citizens against investing in the cryptocurrency market following the Terra (LUNA) and the stablecoin TerraUSD (UST) saga. 

The Governor of the RBI, Shaktikanta Das, discussed the cryptocurrency market crash and the necessity for a legal framework surrounding cryptos in an interview on May 23. 

The governor said,

“We have been cautioning against crypto and look at what has happened to the crypto market now,” adding that “if they had been regulating it already, then people would have raised questions about what happened to regulations.” 

The breakdown of market conditions was aided by the fall of Terra (LUNA) and the algorithmic stablecoin TerraUSD.  

Looking at this, Das expressed his thoughts regarding crypto in general, saying,

“This is something whose underlying (value) is nothing. There are big questions about how you regulate it. Our position remains very clear, it will seriously undermine the monetary, financial, and macroeconomic stability of India.” 

In addition, the governor emphasized that the position taken on cryptocurrencies by the central bank is shared by the Indian government as well. Also, the head of the central bank stressed that they had informed the government of their perspective and that they will decide after going through it. 

Recently, Armstrong argued that Coinbase India disabled payments by the Unified Payments Interface (UPI) just days after launch because of “informal pressure” from the RBI.  

Following this, the governor said that he did not want to comment on the hypothetical remarks offered by those from the outside when he was questioned to give his thoughts.