As Bitcoin ETFs begin trading in US, RBI’s Das says emerging markets can’t afford ‘crypto-mania’

As Bitcoin ETFs begin trading in US, RBI’s Das says emerging markets can’t afford ‘crypto-mania’

A day after the US equity markets regulator allowed bitcoin exchange-traded funds (ETFs) to list on bourses, RBI Governor Shaktikanta Das said his view remains unchanged that cryptocurrencies pose a significant threat to the financial stability of emerging markets.

Several exchange-traded funds (ETFs) tied to the spot price of bitcoin began trading in the U.S. on Thursday in a landmark moment for the cryptocurrency industry that has been seeking regulatory approval for the financial product for over a decade.

The green light by the US Securities and Exchange Commission came late on Wednesday following months-long talks with top asset managers such as BlackRock, Ark Investments/21Shares, Fidelity, Invesco and VanEck.

The regulator approved 11 such ETFs, paving the way for popularising investments in the world’s biggest cryptocurrency without the risk of holding the digital token directly.

A decade in the making, the ETFs are a game-changer for bitcoin, offering investors exposure to the world’s largest cryptocurrency without directly holding it. They provide a major boost for a crypto industry beset by scandals.

Das said: “Just because somebody is doing something, we are not here to emulate them. Travelling down that will create huge risks, which going forward, will be very, very difficult to contain.”

The RBI Governor has long expressed reservations on cryptocurrencies.

“The question arises, why do you need to travel down that road? What is it that you get out of it? It is the speculative nature of that product, which enables some people to make, perhaps, big money for some time, but the majority of the people are not going to make big money all the time,” he said.

He said even the US capital markets regulator, while announcing approving Bitcoin spot ETFs, has also issued necessary warnings to the investors to be careful.

“I don’t think the world, and in particular, the emerging market economies, can afford crypto mania…,” he said.

With Reuters inputs

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