Indian Central Bank Chief: US Banking Crisis Clearly Shows Risks Crypto Poses to the Financial System

India’s central bank governor, the Reserve Bank of India (RBI), says the “ongoing banking crisis in the US” clearly demonstrates the risks that cryptocurrencies pose to the financial system. The head of the central bank added that “the Indian economy remains resilient,” stressing that “the worst of inflation is behind us.”

The head of the Central Bank of India on cryptocurrency risks and the US banking crisis

India’s central bank governor, the Reserve Bank of India (RBI), warned of the risks cryptocurrencies pose to the financial system when commenting on the US banking turmoil at the 17th KP Hormis Commemorative Lecture on Friday. RBI Governor Shaktikanta Das said:

The ongoing banking crisis in the US highlights the importance of sound regulators, sustainable growth, and clearly shows the risks of private cryptocurrencies to the financial system.

Das was referring to the recent collapses of several banks in the US. Last Sunday, Signature Bank was seized by the New York State Department of Financial Services and Silicon Valley Bank was closed by regulators last Friday. They became the second and third largest bank in the US to fail. In addition, Silvergate Bank announced a voluntary liquidation earlier this month.

Some people believe that the actions of regulators against crypto-friendly banks are related to cryptocurrencies, including Senator Elizabeth Warren (D-MA), who attributed the failure of Signature Bank to accepting crypto clients without sufficient guarantees. However, regulators insist that their actions have nothing to do with cryptocurrencies.

India’s central bank governor stressed that the banking crisis in the US shows “the need for prudent asset and liability management.” In addition, Das said:

The Indian economy remains strong. The worst inflation behind.

Das, who was named the 2023 Central Banking Awards Governor of the Year on Wednesday, warned repeatedly about crypto risks. Cryptocurrency not only poses a serious threat to India’s macroeconomic and financial stability, but also seriously undermines the RBI’s ability to set monetary policy and regulate the country’s monetary system, according to the head of the Indian central bank.

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

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