Indian Central Bank Chief Likens Crypto to Tulips

The Reserve Bank of India’s governor has stated that cryptocurrencies a “threat” to financial stability. He also said that their underlying value amounted to less than a tulip.

India’s Central Bank Questions Crypto’s Value

India’s central bank appears set on its anti-crypto stance.

Shaktikanta Das, the governor of the Reserve Bank of India, made fresh comments against crypto assets Thursday, describing private cryptocurrencies such as Bitcoin and Ethereum as a financial threat. Das also opined that crypto assets have less value than a tulip.

“I have spelt out the RBI’s stance before, too. Our position is very clear. Private cryptocurrency is a big threat to India’s macroeconomic and financial stability,” Das stated on earlier today while speaking with the media.

He warned Indians against investing in cryptocurrency, claiming their underlying value is less than a tulip.

“It is my duty to tell investors who invest in cryptocurrencies to keep in mind that they are investing at their own risk. These cryptocurrencies do not have an underlying value—not even a tulip,” the governor added. Das’ comment on tulips is likely a reference to the 17th Century European tulip bubble, where the price of the flower rose to extremely high levels only to crash years later.

The comments from the reserve bank governor have made it clear that despite recently introducing crypto taxation rules, the Indian central bank will maintain its long-standing disapproval of the asset class. Since 2013, the Reserve Bank of India has cautioned investors against investing in cryptocurrencies via public notices. In 2018, the apex bank ordered commercial banks to support servicing crypto exchanges, but the rule was overturned by India’s Supreme Court in 2020.

India is still waiting for more explicit regulations surrounding cryptocurrencies. According to reports, the much-needed regulatory clarity will likely come with a crypto-specific bill that is yet to be presented in the country’s Parliament.

Disclosure: At the time of writing, the author of this piece owned ETH and other cryptocurrencies.