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Bitcoin, the world’s largest cryptocurrency, came under sharp criticism after the Reserve Bank of India’s Deputy Governor T. Rabi Sankar said the digital asset has no real value and is driven only by speculation.
Despite raising such concerns from the Deputy Governor, crypto adoption in India continues to grow rapidly in spite of strict taxes and regulations.
Bitcoin Doesn’t Hold Real Value
Speaking at the Mint Annual BFSI Conclave 2025, RBI Deputy Governor T. Rabi Sankar said Bitcoin should not be seen as money or a financial asset. He explained that while the blockchain technology behind Bitcoin is innovative, Bitcoin itself was only created to showcase that technology, not to hold real value.
Sankar noted that blockchain proved it is possible to transfer digital tokens between unknown parties without needing a trusted middleman. This breakthrough opened the door to many useful applications across finance and other sectors.
However, he stressed that Bitcoin was never meant to represent value in the same way money does.
Bitcoin Compared to Tulip Mania
Further explaining his point, Sankar compared Bitcoin’s price movement to the famous tulip mania of the 17th century. He said Bitcoin’s price exists only because people are willing to pay for it, not because it has any underlying worth.
He added that Bitcoin is not backed by any issuer, promise to pay, or cash flow. Because of this, he believes it does not qualify as real money. He also argues that cryptocurrencies are not true financial assets since they do not earn income or represent ownership in a business.
Meanwhile, he warned that crypto is highly volatile, which is clear as Bitcoin is nearly 30% below its peak, while many other cryptocurrencies are down 40% to 70%.
India’s Growing Crypto User Base Despite Warnings
Despite these strong warnings from the central bank, India’s crypto market continues to expand. The country now has over 100 million crypto users, making it one of the largest crypto markets globally.
However, the government has maintained a cautious approach. In 2022, India introduced a 30% tax on crypto gains along with a 1% tax deducted at source (TDS) on every trade.
These measures were designed to discourage excessive speculation while allowing authorities to monitor activity in the sector.