Reserve Bank of India governor: Numbers on crypto market participants highly exaggerated: RBI Governor

Synopsis

Bulk of the investors about 70 per cent or even more have invested about Rs 1000-Rs3000, perhaps there is an effort to enroll as many people as possible, Das said.

Mumbai: The numbers of Indians trading in cryptocurrencies looks highly exaggerated, Reserve Bank of India governor Shaktikanta Das said on Wednesday while highlighting once again his concerns over the proliferation of virtual currencies. Das said that over 70 per cent of investors did not invest more than Rs 3000. Cryptocurrency exchanges had recently claimed through advertisements that Indian crypto investments had topped Rs 6 lakh crore with over 10 crore Indians actively trading in this space.

“In terms of the amount that has been invested it’s definitely growing and anecdotally we hear so many things,” RBI Governor Das said while speaking to a publication. “But, I am not so sure about the numbers that are being quoted. Because, whatever information we have, with a reasonable amount of confidence I can say that the number of participants in the crypto market seems exaggerated.”

Bulk of the investors about 70 per cent or even more have invested about Rs 1000-Rs3000, perhaps there is an effort to enroll as many people as possible, Das said.
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The RBI governor also reiterated his concerns over the financial instability such investments could cause and stated that the government was actively considering its recommendations.

“People are doing certain activity, as a central bank we have serious concerns from the macroeconomic and financial stability point of view,” he said. “How the issue has to be dealt it, we have given our detailed suggestions to the government. As far as I know, the matter is under active consideration of the government and it will decide.”

ET had recently reported that the government is looking to table the draft bill on regulating virtual currencies in the budget session of the parliament. The government’s current plan includes creating a broad framework around crypto assets that would give them legal credence in India.

Meanwhile, crypto exchanges are lobbying for definition of different types of crypto assets. The exchanges want the government to at least differentiate between various crypto assets and technologies such as NFT, decentralised finance (DeFi) and Meme coins. As per the existing cryptocurrency bill draft, the government is looking to just put the basic framework in place without articulating the asset class or who will regulate the cryptocurrency.

In the last few months, Indian investments in Cryptocurrencies hit the $10 billion mark, ET first reported on November 1. Currently, around 10.5 crore or 7.9 per cent of Indians have invested in Cryptocurrencies through Indian exchanges, as per the data compiled by CREBACO, a research firm.

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Updated: 11/10/2021 — 12:00