Indian Central Bank Maintains Stance on Crypto Risks
The Reserve Bank of India (RBI) Governor, Shaktikanta Das, reaffirmed the central bank’s position on cryptocurrencies, despite global trends. Das emphasized that the RBI’s stance remains unchanged, regardless of developments in other countries like the US approving Bitcoin ETFs. He expressed concerns about the risks associated with cryptocurrencies and their potential impact on emerging and advanced economies. Das compared the cryptocurrency frenzy to historical financial bubbles like the Tulip mania and questioned the effectiveness of regulation in this industry.
India’s Approach to Central Bank Digital Currency
While remaining cautious about cryptocurrencies, Governor Das highlighted India’s focus on central bank digital currencies (CBDCs). The RBI is actively exploring wholesale CBDC expansion and programmable features in retail CBDCs. This approach aims to give senders the ability to specify end uses for digital currency. The successful implementation of CBDCs has contributed to the RBI’s goal of achieving one million daily transactions by the end of 2023. Additionally, discussions are underway with other countries for the adoption of India’s Unified Payments Interface in cross-border transactions.
Hot Take: India Remains Cautious About Cryptocurrencies
The Reserve Bank of India continues to maintain its cautious stance on cryptocurrencies despite global trends. Governor Shaktikanta Das believes that cryptocurrencies lack underlying value and pose risks to economic stability. While India explores the potential of central bank digital currencies, it remains skeptical about embracing cryptocurrencies due to their potential impact on emerging and advanced economies. The RBI emphasizes the need for a measured and strategic approach to navigate the evolving digital financial landscape.
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