India’s RBI Deputy governor T Rabi Sankar, reflected the anti-crypto stance as he spoke about the country’s potential to disrupt the crypto ecosystem, saying that CBDCs can kill private crypto so let’s find out more today in our latest cryptocurrency news.
“One of the reasons it is so successful is because it’s simple.”
In a discussion with the International monetary fund, India’s RBI Deputy governor confirmed the anti-crypto stance and spoke about the country’s potential to disrupt the blockchain ecosystem. Sankar started the conversation by outlining the success of the Unified Payments Interface which is the in-house fiat-based peer to peer payments system that saw an average adoption growth of 160% per year, in the past five years:
“One of the reasons it 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.”
June 2 at 7:00am ET // At the Frontier: India's Digital Payment System and Beyond will explore the latest developments in digital payments with a focus on lessons from India as well as future with a significant role for Central Bank Digital Currencies. https://t.co/ZSj7i15fBG pic.twitter.com/X6cVyHewEs
— IMF (@IMFNews) May 31, 2022
The RBI official confirmed that a large population in India lacks access to UPI-based banking because of the unavailability of smartphones. To counter this, the government is working on offline payment platforms and some already started rolling out to the masses. Rabi Sankar stated the banks will remain crucial for providing liquidity services for the general public in India and warned that the technology is only a tool and can’t be used to create currencies:
“A currency needs an issuer or it needs intrinsic value. Many cryptocurrencies which are neither are still being accepted at face value. Not just by gullible investors but also the experts, policymakers or academicians.”
He stated that the RBI doesn’t believe that stablecoins such as Tether should be accepted as to 1-to-1 fiat pegged currencies and he added:
“We believe that central bank digital currencies (CBDCs) could actually be able to kill whatever little case that could be for private cryptocurrencies.”
RBI even proposed a three-step approach for launching a CBDC with little to no disruption to the financial system. Finance Minister Nirmala Sitharaman revealed the plan to launch a CBDC in 2023 with the goal to boost the digital economy but the RBI report revealed that the bank is now experimenting to develop a CBDC that addresses a wide range of issues in the traditional system.
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