Crypto currencies have no underlying value, says RBI official

Crypto currencies cannot be referred to as “currencies” as they have no underlying value, a central bank official said.

The Reserve Bank of India (RBI) has been critical of new-age currencies like bitcoins, saying they pose systemic risk to the financial systems.

“Crypto currencies cannot be called currencies as they don’t have any underlying value,” P Vasudevan, an executive director at the RBI, said during a panel discussion organised by IIM-Kozhikode here.

Also Read | What to expect in crypto and blockchains in 2024?

Ultimately it is a call that the government has to take on how to tackle crypto currencies, the official said.

Currently, bitcoins have no legal backing in India and investors have to pay a tax on the income earned by trading in them.

In the backdrop of the action against Paytm Payments Bank and curbs imposed on some international card providers, Vasudevan said self-regulation can protect the fintech sector better.

He also said that mechanisms could be looked at to highlight bad behaviour.