Governor Shaktikanta Das says ‘cryptos’ are a major threat to macroeconomic and financial stability. Today he reiterated his stance on private cryptocurrencies.
Citing a 17th century Tulip Mania, Das said there is no underlying value of crypto’s not even to the value of a tulip.
What is Tulip Mania?
This Tulip Mania of the 17th century is often cited as a classic scenario of a financial bubble burst.
In the Netherlands, Tulips had been introduced as a new commodity and people like maniacs had bought large quantities. This increased the prices of Tulips. After the prices reached the highest point, the market crashed and those Tulip holders became overnight bankrupts.
‘Crypto investors invest at their own risk’
RBI Governor reiterated today, “It’s my duty to caution investors to keep in mind that they are investing at their own risk. They also need to keep in mind that the Crypto has no underlying value, not even a tulip.”
His comments have a major significance because it comes days after the Union Budget has levied a 30 % tax on profits made from the Bitcoin or Crypto transactions.