Reserve Bank of India governor T Rabi Sankar says that Central Bank Digital Currencies (CBDC) could kill cryptocurrencies.
“We (RBI) believe that CBDCs would actually be able to kill whatever little case there could be for private cryptocurrencies.”
Rabi Sankar spoke at IMF webinar
Rabi Sankar proposed in his speech that just because private cryptocurrencies are backed by hi-tech, they should not be permitted. He highlighted that no matter what the technology might be, it is a tool that can certainly be put to the wrong use.
The RBI governor’s statement on private cryptocurrencies follows the central bank’s release of the crypto consultation paper.
India and its upcoming CBDC
India has always been ambiguous and uncertain about its stance on cryptocurrencies. The country has always viewed cryptocurrency as a threat to the nation. The outlook is that the government doesn’t even consider the slightest possibility of accepting cryptocurrency as a legal tender.
“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, stablecoins that are pegged to a particular currency, their unquestioned acceptance seems puzzling to me.”
Rabi Sankar
Rabi Sankar believes that technology is growing extremely rapidly and says that not every innovation is desirable. The country has been working on deploying its CBDC. The government is looking to take a progressive and slow approach with proper pilot testing.
RBI’s governor also compared blockchain technology to the UPI technology present in India. He said that blockchain technology had not been fully implemented as it was supposed to be.
“He said, “One of the reasons it [UPI] is so successful is because it’s simple…Blockchain, which was introduced six-eight years before UPI started, even today is being referred to as a potentially revolutionary technology. [Blockchain] use cases haven’t really been established that much at the speed it initially was hoped for.”
Rabi Sankar