While Bitcoin is scaling new heights and is embraced by heavyweights like Elon Musk, India’s central bank doesn’t seem to have faith in cryptocurrencies.

In an interview with business news channel CNBC TV-18 last week (Feb. 24), Reserve Bank of India (RBI) governor Shaktikanta Das said that the central bank has “certain major concerns about cryptocurrency” and its impact on financial stability. Das also said that he had conveyed his concerns to the Indian government, which is scheduled to table a bill in the parliament banning private digital currencies.

This statement of concern by Das can have huge ramifications for the crypto space in India. Just a year ago, Indian cryptocurrency exchanges were reeling under the effect of an RBI circular that asked financial institutions not to support digital currencies. While this circular has been overturned by the court, the shadow of a ban on cryptocurrencies in India still looms large.

Despite receiving endorsements from global financial institutions, why is Bitcoin still viewed with suspicion in India? Are Das’ concerns legitimate?

Bitcoin is volatile

Sure, there is a grain of truth to the claim that cryptocurrencies are rivals of central banks as they are unable to control them like sovereign money. However, the concerns raised by the RBI governor aren’t completely unfounded.

For instance, the most prominent digital currency, Bitcoin, has given stellar returns since its inception, beating all asset classes over a decade. But it remains a speculative bet.