RBI Crypto News: Cryptocurrencies have no underlying value, not even a tulip: RBI Guv

Synopsis

It is my duty today to tell investors that while betting on cryptos, they should be mindful that they are investing at their own risk, Das said

Private crypto assets or virtual digital currencies are a major threat to macroeconomic and financial stability of a country, Reserve Bank of India (RBI) governor Shaktikanta Das said at press conference held on Thursday.

I have said that investors are their own judge. But, it is my duty today to tell investors that while betting on cryptos, they should be mindful that they are investing at their own risk.

“Cryptocurrencies have no underlying (value), not even a tulip,” Das said at the meeting.
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Finance Minister Nirmala Sitharaman announced tax on gains arising from the sale of private crypto assets at a flat rate of 30 per cent, without any deduction or exemption.

The loss arising from the sale of any virtual assets cannot be set off against any other income. TDS at the rate of 1 per cent would be levied on payments made on transfer of digital assets.

Commenting on the central bank digital currency (CBDC) backed by RBI, the central bank said that it will be the digital or electrical form of India’s fiat currency. CBDC will be issued by the apex bank of the country as a legal tender.

As crypto-assets get more and more interconnected with traditional financial systems, the need to better regulate them becomes relevant to address investor risks, said Anupam Shukla, Partner, Pioneer Legal.

“Until such time, the authorities institute a suitable enforcement framework, investors dabbling in this sector will remain exposed to risks. Also, the price volatility endemic to cryptocurrencies has an impact on the central bank’s monetary policies and capital management frameworks,” he added.

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Updated: 02/10/2022 — 11:00