Cryptocurrency ‘will undermine authority of RBI’, says bank boss

The governor of India’s central bank, the Reserve Bank of India (RBI), has called for a ban on all cryptocurrencies, saying they “will undermine the authority of the RBI and lead to the dollarization of the economy”.

Speaking at a recent economic conference, Shaktikanta Das stressed that the central bank’s view is to completely ban cryptocurrencies like bitcoin and ether, saying they have no underlying value.

He said: “Some people call cryptocurrency an asset, some call it a financial product, but every asset or financial product needs to have an underlying value. But cryptocurrency does not have any underlying value,” and he likened cryptocurrency trading to gambling.

“Anything whose valuation is dependent entirely on make-believe is nothing but 100% speculation, or to put it bluntly, it is gambling,” Das said. “In our country, we don’t allow gambling. If you want to allow gambling, treat it as gambling and lay down the rules.”

And he added: “Cryptocurrency masquerading as a financial product or a financial asset is a completely misplaced argument.”

The bank governor also warned about the risks crypto poses to the Indian economy. He said: “The Reserve Bank, being the monetary authority of the country as the central bank, will lose control over the money supply in the economy … It will undermine the authority of the RBI and lead to the dollarisation of the economy.” Almost all cryptocurrencies are dollar-denominated and issued by foreign private entities.

India does not have a regulatory framework for cryptocurrencies, although the government has been working on a crypto bill for several years.

Most Indian CEOs expect global growth to slow this year

Nearly 78% of India’s CEOs believe global economic growth will slow over the next 12 months, according to a survey by PwC.

However, almost six out of 10 Indian CEOs (57%) said they were optimistic about India’s economy over the next 12 months. This compares favourably with the 37% of Asia-Pacific CEOs and 29% of global CEOs who expect economic growth to improve in their countries or regions in that timeframe.

However, 41% of CEOs globally believe that their organisations will not be economically viable in 10 years’ time if they continue on their current path. “In particular, 62% of India CEOs believe that changing customer demand will impact profitability in their industry over the next 10 years to a large or very large extent, while 54% are concerned about changes in regulations,” the survey said.

It also found that 85% of India CEOs do not plan make redundancies, and 96% do not plan to reduce remuneration as they aim to keep key staff members.

The survey states that countering the impact of the economic downturn is top of the to-do list for India’s CEOs this year, especially inflation (35%) and macroeconomic volatility (28%) leading the risks weighing on CEOs’ minds in the short term. Climate change (24%), geopolitical conflict (22%) and cyber risks (18%) were also issued highlighted by the respondents.

Sanjeev Krishan, Chair, PwC in India, said: “To survive over the next few years, CEOs will need to manage external risks and drive profitability. In the long term they will also need to reimagine, reinvent and reconfigure their businesses and work culture to thrive. Importantly, they need to act on both now, and simultaneously. If organisations are to remain viable in the near and long-term, they must also invest in their people and technological transformation agendas to empower their workforces.”

PwC’s 26th Annual Global CEO Survey polled 4,410 CEOs in 105 countries and territories, including 68 from India, between October and November 2022.

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