Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar says central bank digital currencies could “kill whatever little case there could be” for cryptocurrencies, like bitcoin and ether.
RBI’s Deputy Governor Discusses Impact of CBDCs on Cryptocurrencies
RBI Deputy Governor T. Rabi Sankar talked about the potential impact of central bank digital currencies (CBDCs) on cryptocurrencies, like bitcoin and ether, at a webinar organized by the International Monetary Fund (IMF), local media reported Friday.
He was quoted as saying:
We (RBI) believe that CBDCs would actually be able to kill whatever little case there could be for private cryptocurrencies.
By “private cryptocurrencies,” the Indian government and the central bank refer to all non-government-issued cryptocurrencies, including bitcoin and ether.
Sankar explained the central bank’s stance that cryptocurrencies should not be permitted “just because they are backed by hi-tech.” He added:
Any tool that can be used for good can also be put to undesirable uses. Technology, at the end of the day, is a tool.
Meanwhile, the Indian government is still working on the country’s crypto policy. This week the economic affairs secretary revealed that the government is finalizing a consultation paper on cryptocurrencies.
The RBI has long warned about cryptocurrencies being a threat to India’s financial system and should never be recognized as legal tender like some countries, including El Salvador, have done. The bank also warned that crypto could lead to the dollarization of the Indian economy.
Sankar detailed: “A currency needs an issuer or it needs intrinsic value. Many cryptocurrencies which have neither are still being accepted at face value – not just by gullible investors but also by expert policymakers and academicians.” The official elaborated:
Most cryptocurrencies have an equilibrium value of exactly zero, but they are still priced sometimes at fantastical levels.
“But even where cryptocurrencies do have value, for example, some stablecoins that are pegged to a particular currency, their unquestioned acceptance seems puzzling to me,” he opined.
The Indian central bank is currently developing its own CBDC. The bank said this week that it will take a “graded approach” to launching the digital rupee.
Do you think central bank digital currencies could kill cryptocurrencies like bitcoin? Let us know in the comments section below.
Kevin Helms
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
More Popular News
In Case You Missed It
Source: https://news.bitcoin.com/rbi-official-central-bank-digital-currencies-could-kill-cryptocurrencies/
