Reserve Bank of India Deputy Governor T. Ravi Shankar says with full confidence that digital banking assets or CBDCs will eventually plug on cryptocurrencies like Bitcoin, Ethereum and others. So, is this seriously the end of the line for crypto?
RBI Deputy Governor T. Ravi Shankar says:
“We believe that CBDCs will be able to kill for personal cryptocurrency anything that may happen in the slightest.”
He added that cryptocurrencies are supported by technology, a tool that can be used for both good and bad reasons.
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CBDCs will spell doom for crypto, RBI says. (Rediffmail.com)
RBI a threat to India’s financial system?
The Government of India is still in the process of revising its cryptocurrency policies and regulations Seeing cryptocurrency as a threat to India’s financial system, the RBI has always been against cryptocurrency.
They know how cryptocurrency is widely popular and accepted even by celebrities, influential and government authorities and suspect that adoption of crypto could ultimately lead to rupee disintegration and great monopoly of US dollars.
Shankara further reiterated that any currency should always have an intrinsic value and a central authority or issuer. That being said, cryptocurrencies that do not have these important qualities should not be accepted by investors and policy makers.
The acceptability of cryptocurrencies with zero intrinsic value is problematic for Shankar. He even wonders why cryptocurrencies accept stable coins pegged to certain currencies. The growing popularity of crypto and NFT is seen as a threat to both India’s sovereignty and economy.
Crypto total market cap at $1.20 trillion on the daily chart | Source: TradingView.com
RBI to launch digital rupee
Shankar’s objections to mainstream crypto increase the Indian government’s refusal to accept them.
In this light, the Central Bank of India is taking a slow but steady approach to developing and launching its own CBDCs. The consultation paper considers various regulations and policies of other countries.
So, what do the giant crypto players have to say about the RBI statement?
Crypto players took these cold shoulders, saying that the RBI was only projecting the indomitable power of crypto. This seems to be a threat to the Indian economy, and the RBI is being defensive about it.
As India moves towards CBDC, the government has gradually enacted laws and regulations in line with the adoption of crypto. Profits from crypto investments have recently been taxed at 30%.
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Featured image from Indianmoney.com, chart from TradingView.com