The head of the central bank of India saw cryptocurrencies as a threat to the country's economy

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Management of the Reserve Bank of India (RBI) assures that the country's authorities share the regulator's concerns regarding the threat posed by the crypto industry.

RBI Governor Shaktikanta DasDas said the central bank is warning investors against investing in digital currencies due to recent market developments. This refers to the collapse of the stablecoin TerraUSD (UST) and the Terra cryptocurrency (LUNA), the head of the RBI said in an interview with CNBC. According to Shaktikanta Das, the bank is currently monitoring the market situation to understand the root causes of the collapse and formulate clear rules for Indian investors:

“If what happened was in our zoneresponsibility, then people would already have questions about our competence. Therefore, we urge investors to refrain from purchasing digital currencies for a while until we understand what is happening in the cryptocurrency markets.”

The value of cryptocurrencies is practically nothingis supported, the head of the RBI assures. Cryptocurrencies could undermine India's monetary, financial and macroeconomic stability, and their further proliferation, Das says, could lead to the dollarization of the Indian economy.

The official is convinced that the Indian authorities sharethe regulator's position on cryptocurrencies, as the RBI has made its views on the crypto industry clear. The Indian government is concerned about the situation, says Das, and is actively working on legislation on digital currencies.

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Previously CEO of cryptocurrencyCoinSwitch exchange Ashish Singhal stated that uncertainty with the rules for regulating cryptocurrencies in India greatly slows down the development of the industry in the country.