Reserve Bank of India Governor Shaktikanta Das said in a press conference that cryptocurrencies have no underlying value and that they are “not even a tulip,” warning investors of its risks. 

Fast facts

  • Das’s comments come just over a week after India’s central government announced a 30% taxation plan on income from crypto assets as well as a 1% TDS (Tax Deducted at Source) on crypto asset transfers.
  • Metaphorically, the term “tulip mania” — originating from the Dutch tulip bulb market bubble of the 17th century — is often used to describe large economic bubbles when asset prices digress from fair values.
  • JPMorgan, in a recent analysis, set Bitcoin’s fair value at US$38,000, about 13% lower than its current trading price.
  • India’s central bank plans to introduce its own digital currency sometime in the next financial year beginning April 1. 
  • RBI has consistently opposed cryptocurrency trading in India and had even tried to stop banks from facilitating transactions through a circular issued in 2018, which was later struck down by the Supreme Court.