“The way we view cryptocurrencies does not change, no matter who does,” Reserve Bank of India (RBI) Governor Shaktikanta Das said at the 16th BFSI Annual Meeting and Mint Awards in Mumbai on Thursday. Thursday. "We're not here to copy because someone else did something."
The US Securities and Exchange Commission (SEC) on Wednesday approved the first US ETF to track bitcoin, marking a major milestone for the world's largest cryptocurrency and the entire cryptocurrency industry. . The SEC approved 11 applications, including those from BlackRock, Fidelity and Invesco. At the same time, the SEC stated that it does not support or accept Bitcoin.
“RBI's stance on cryptocurrencies remains unchanged. There will be many risks in following this path. I don't think the world or emerging markets (EM) can handle crypto mania like tulip mania." Price surge and collapse of one of the most famous asset bubbles. History.
Das, who gave a keynote speech at the event, noted that US regulators have taken note of the risks of cryptocurrency products. However, he noted that the blockchain technology on which cryptocurrencies are built has many applications.
The governor has expressed concerns about cryptocurrencies several times before, citing risks to macroeconomic and financial stability. In June 2022, Das called them a "clear risk" and said anything profiting from "baseless" speculation was just speculation with a fancy name.
Das said the central bank is emphasizing good governance and strengthening trust in regulated institutions. “The key is to identify risks early, monitor them carefully and manage them effectively. In this context, it is important to build the appropriate risk culture in the organization.” A more active role.
At another event later in the day, the governor said the RBI is working on a framework to safeguard stressed assets, for which it had issued a discussion paper in January 2023. “We have received the feedback, analyzed it and now have. We are on track to implement a revised framework for securitization of stressed assets,” Das said.
On the other hand, Das indicated prosperity through unsecured loans.
“There was FOMO, or fear of missing out; "It was an opportunity that everyone thought they would take advantage of," he said. "It was very clear that this growth, if not moderate, would not be sustainable in the future," he said.
In November, the RBI increased the risk weight assigned to unsecured consumer loans such as personal loans and credit card charges. The situation was monitored for several months after banks were warned not to lend in this category.
Meanwhile, banks and non-bank financial institutions are turning to credit insurance using algorithm-based models. This practice has come under scrutiny by the RBI. “The bank's management, board of directors, audit and risk management committees must be convinced of the accuracy of these models.
Another challenge facing the RBI is the increasing number of loan applications. RBI has compiled a list of all schemes associated with or owned by lenders to help identify fraudulent schemes.
"Law enforcement agencies now have more responsibility to identify illegal apps," Das said. “Because we don't control the applications. “We only regulate banks and NBFCs.”
Talking about the RBI's New Umbrella Entity (NUE) proposal to make way for its rival National Payments Corporation of India (NPCI), Das said the proposals received by the RBI are not new.
“In my opinion, most of the proposals are repetitions of what NPCI has already done. "Some of the new innovative ways we're looking at add value to our payment system in ways we haven't seen before."
Das, however, reserved the last word on the NUE and said the RBI would soon express its official opinion on the matter and provide necessary clarifications.
However, Das emphasized that the Unified Payments Interface (UPI) is a "public digital infrastructure and an open platform for all." He said the development of toll highways and cooperation with many other countries.