Cryptocurrencies huge risks to financial stability: RBI Governor Das

economictimes.indiatimes.com:

Cryptocurrencies are huge risks to financial stability, and monetary stability, Reserve Bank of India Governor Shantikanta Das said Friday, asserting it may create a situation where the central bank may lose control of money supply in the economy. «I am actually of the opinion that this is something which should not be allowed to dominate the financial system.

Because it has huge financial stability risks, it has huge monetary stability risks, it also poses risks to the banking system. It also may create a situation where the central bank may lose control of money supply in the economy,» RBI Governor Shantikanta Das said during his appearance at the Peterson Institute for International Economics, a think-tank.

«If the central bank loses control of money supply in the economy, how does the central bank check liquidity available in the system? How does a central bank control inflation by squeezing money supply or by losing money supply in times of crisis? So, we see crypto as a big risk, and there has to be an international understanding because the transactions are cross-country,» he said in response to a question.
«There has to be (an) international understanding on this issue, being fully mindful of the huge risks associated with cryptocurrencies.

It is not something which I feel it's not something which should be encouraged. This view is not a very popular view, but I think as custodians of financial stability, it is a major concern for central banks world over.

Governments are also becoming increasingly aware of the possible downside risks in cryptocurrencies,» Das said.