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

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The governor of India’s central bank, the Reserve Bank of India (RBI), says the “current US banking crisis” clearly shows the risks cryptocurrencies pose to the financial system. The central bank chief said that “the Indian economy remains resilient,” while asserting that “the worst of inflation is behind us.”

India’s central bank governor on crypto risk and the US banking crisis

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

The ongoing US banking crisis has driven home the importance of strong regulators, sustainable development and clearly shows the risks private cryptocurrencies pose to the financial system.

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Das was referring to the collapse of several banks in the US last Sunday, with Signature Bank being 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 America to fail. In addition, Silvergate Bank announced a voluntary liquidation earlier this month.

Some believe that regulatory actions against crypto-friendly banks are related to crypto, including Senator Elizabeth Warren (D-MA), who blamed Signature Bank’s failure to accept crypto customers without adequate safeguards. Held responsible. However, the regulator has insisted that their actions have nothing to do with cryptocurrencies.

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The Indian central bank governor insisted that the US banking crisis reflected “the need for prudent asset liability management”. Furthermore, Das said:

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

Das, who was named Governor of the Year by the Central Banking Awards 2023 on Wednesday, has repeatedly warned crypto risk, According to the head of India’s central bank, cryptocurrencies not only pose a significant threat to India’s macroeconomic and financial stability, but also seriously undermine the RBI’s ability to set monetary policy and regulate the country’s monetary system.

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What do you think about the statement of RBI Governor Shaktikanta Das? Let us know in the comments section below.

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