Shaktikanta Das, the Governor of the Reserve Bank of India (RBI), has said the “ongoing U.S. banking crisis” clearly shows the risks crypto poses to the financial system.
The head of the RBI, Shaktikanta Das, has said that the current banking crisis in the United States clearly shows the risks that cryptocurrencies pose to the financial system. Das’ statement echoes the controversial comments he made in December, arguing that should crypto be left to grow, it might cause the next financial crisis.
Das commented on the current banking turmoil in the U.S. at the 17th K P Hormis Commemorative Lecture on Friday, where he said:
The ongoing U.S. banking crisis drives home the importance of robust regulators, sustainable growth and clearly shows the risks of private cryptocurrencies to the financial system.
The Governor’s comments obviously refer to the collapse of several crypto-friendly banks in the U.S. over the past weeks. On Sunday, New York State financial regulators announced that it had shut down Signature Bank. Signature has several clients in the crypto space.
The collapse of Signature comes amid the fallout of Silicon Valley Bank (SBV), which was closed down by regulators just days prior. Earlier in the month, the crypto-focused bank, Silvergate, shut down operations after struggling to stay afloat in the aftermath of FTX.
Indian Economy Remains Resilient
Das further highlighted the need for prudent asset-liability management, regular stress tests, and building up capital buffers. He claims that India’s overall external debt is under control.
At the height of the pandemic, we kept on highlighting the need to build up adequate capital. I am happy to say that almost all the Indian banks took the message and kept additional capital.
The Governor’s speech primarily focused on India’s G20 presidency and advocated for a more concerted effort by the Group of 20 to assist those nations that face external debt due to the U.S.’s strengthening currency. He reassured the Indian government that the country has a stable financial system and has passed the inflation peak. He added that as India controls its external debt, the rising dollar does not threaten the country.
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