Reserve Bank of India Governor Shaktikanta Das on Thursday said that private cryptocurrencies are a threat to macroeconomic and financial stability, reported PTI.

Das said it was his duty to caution investors on cryptocurrencies and told them that they were investing at their own risk. “They should keep in mind that these cryptocurrencies have no underlying [asset], Not even a tulip,” the governor said.

Das was referring to the “‘tulip mania” which concerned the Dutch financial craze for tulip bulbs in the 1630s. At that time in the Netherlands, tulip bulbs were being traded at extraordinarily high prices – sometimes at the price of houses. This had led to a market crash in February 1637.

Bitcoin, which is the top cryptocurrency as on Thursday, is often called “tulip mania 2.0”.

“Tulip mania” is often cited as the classic example of a financial bubble, in which asset prices are much higher than the underlying fundamentals of the item can be reasonably justified.

Digital rupee

On Thursday, when asked about the introduction of the central bank digital currency, Das said he could not give a timeline, reported The Indian Express.

While presenting the Union Budget on February 1, Finance Minister Nirmala Sitharaman announced that the new digital rupee will be introduced this year using blockchain technology. Blockchain is a digital ledger of transactions that is distributed across the entire network of computer systems.

Das said that they are carefully and cautiously working on their blockchain project. “We have to keep risks like cyber-security and counterfeiting in mind,” he said. “So we are proceeding cautiously and can’t give a timeline.”

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Tulip mania: The classic story of a Dutch financial bubble is mostly wrong