The US banking crisis clearly shows the risks that crypto poses to the financial system – regulation

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

The Governor of the Central Bank of India on Crypto Risks and the US Banking Crisis

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

The ongoing US banking crisis highlights the importance of robust regulators and sustained growth, and clearly highlights the risks private cryptocurrencies pose to the financial system.

This was in reference to the recent collapse of several banks in the US. Last Sunday, Signature Bank was seized by the New York State Department of Financial Services, while Silicon Valley Bank was shut down by regulators last Friday. They became the second and third largest banks in the US to fail. Additionally, earlier this month, Silvergate Bank announced voluntary liquidation.

Some people believe regulatory action against crypto-friendly banks is cryptocurrency-related, including Senator Elizabeth Warren (DMA), who attributed Signature Bank’s failure to accepting crypto customers without adequate safeguards. However, regulators have insisted their actions have nothing to do with crypto.

The Indian central bank governor emphasized that the US banking crisis shows the “need for prudent asset-liability management”. In addition, Das said:

The Indian economy remains resilient. The worst of inflation is behind us.

Das, who was named 2023 Governor of the Year by the Central Banking Awards on Wednesday, has repeatedly warned of crypto risks. According to the Governor of the Central Bank of India, cryptocurrency not only poses a significant 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.

What do you think of RBI Governor Shakktanta Das’s comments? Let us know in the comment section below.

Kevin Helms

As a student of Austrian economics, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the interface between economics and cryptography.

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