The Reserve Bank of India Governor Shaktikanta Das believes that cryptocurrency investment is not even worth a tulip. Cautioning investors, he says such investments are even worse than the ‘tulip’ bubble.

“Investors investing in crypto should keep in mind that the money they are investing is at their own risk and these cryptocurrencies do not have an underlying value, not even of a tulip,” said Das. 

The RBI Governor was referring to ‘Tulipmania’, a speculative bubble which took place in the 17th century when Dutch investors purchased tulips, pushing their prices to unprecedented highs. During Tulipmania, the average price of a single flower exceeded the annual income of a skilled labourer and cost more than some houses at the time. 

Voicing concerns about private cryptocurrencies once again, Das said it is his duty to warn investors. “Private cryptocurrencies are a threat to macroeconomic and financial stability. They can undermine the RBI’s ability to deal with issues of financial stability.”

The RBI Governor’s remarks on the highly volatile crypto assets comes days after Finance minister Nirmala Sitharaman proposed a 30% tax on transfer of virtual digital currencies such as crypto in her budget presentation. Finance Secretary TV Somanathan acknowledged that crypto assets come under a grey area, though it is not illegal to buy or sell crypto assets.

The central bank has plans to launch its own digital currency sometime next year.

“We can’t give a timeline on the introduction of central bank digital currency (CBDC). But what I can say is that whatever we are doing, we are doing it very carefully and cautiously. We have to keep risks like cyber-security and counterfeiting in mind. So we are proceeding cautiously and can’t give a timeline,” Das said in a press conference after the central bank’s announcement of its bi-monthly monetary policy.

Meanwhile, RBI has left the benchmark interest rate or repo rate unchanged at 4% for the tenth consecutive time and decided to continue with accommodative stance. It has also left untouched the reverse repo rate.