The Reserve Bank of India (RSI) has recently made a very bold and strong claim against cryptocurrencies. The RSI, which has always despised the crypto industry has made another controversial statement.
According to the RSI, cryptocurrencies are and will always remain risky. As long as they exist, they will continue causing the financial crisis in the entire world.
New Financial Crisis by Crypto
On Wednesday, December 21, Shaktikanta Das, the Government of the RBI issued a statement against cryptocurrencies.
As per Das, cryptocurrencies have always been full of risks and no matter how regulated they are made, the risk factor will always be there.
He went on to claim that the cryptocurrency industry will become the reason for the entire world facing the next financial crisis.
With every passing day, cryptocurrencies continue rooting themselves in the financial systems. It has already become quite difficult to flush out cryptocurrencies from the system.
Over time, cryptocurrencies will get to the bottom of the financial system and end up causing a major catastrophe. The entire world will end up facing a financial catastrophe, which will not go away easily.
Das stressed that even if cryptocurrencies are made regulated and streamlined, they will always pose a risk to the traditional financial system.
Therefore, they can never rule out the risks that cryptocurrencies may impose on the finances of their country. They are fearing that the impact of cryptocurrencies will take down the global financial system.
Cryptocurrencies Must be prohibited
The RBI and the cryptocurrency industry have never seen eye to eye. The central bank of India has opposed the cryptocurrency industry for its volatile and unregulated nature.
India is among the countries that were the fastest to adopt cryptocurrencies. The strong adoption of cryptocurrencies started in India in the mid of 2020.
However, the RBI had already taken notice of the cryptocurrency industry. It had already done enough research to under the pros and cons of cryptocurrencies and it wasn’t happy with its findings.
The central bank continued opposing cryptocurrencies and tried to ban them completely in the year 2021. Still, the government of India adopted cryptocurrencies and has let them operate since then.
Due to the recent events and the major crashes in the crypto market, the RBI has found the opportunity to re-raise the matter. It has raised its concern over cryptocurrencies warning the entire world.
It is using the recent crypto events as its argument to demand that cryptocurrencies must be banned for good.
Das stated that, unlike other online trading assets, cryptocurrencies have no physical existence or collateral to back them. Despite all the claims made by the major crypto firms, they have faced major crashes.
He quotes the FTX crash stating when the FTX exchange crashed, its CEO claimed that FTX.US was facing no such issues. It was an independent entity so it wouldn’t face any issues.
However, the FTX.US exchange ended up filing for bankruptcy a few days after the FTX international exchange had filed for bankruptcy.
He stated that even the most prominent and highly respected figures in the crypto industry tend to lie about their projects and their backing.
It is important that the government of India and the rest of the world realize the true nature of cryptocurrencies. They must ensure that cryptocurrencies are prohibited to operate throughout the world.
Actual Crypto Market Value
Das even claimed that out of the total valuation that the crypto market shows, the actual valuation it holds is just $140 billion.
A few months back, it was at a high of $180 billion but the crypto market has continued to lose its valuation. The rest of the valuation that the cryptocurrency market shows are funds driven by the users.
Given the recent events that have taken place, Das’s claim might be true about the valuation of the crypto industry. Most of the valuations that the firms have shown turned out to be numbers that were not backed at all.
Therefore, investors must remain very cautious when making investments in cryptocurrencies.