Central Bank Digital Currencies Could Kill Cryptocurrencies – Regulation Bitcoin News

Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar says central bank digital currencies could “kill the slightest possible case” for cryptocurrencies, like bitcoin and ether .

RBI Deputy Governor Discusses Impact of CBDCs on Cryptocurrencies

RBI Deputy Governor T. Rabi Sankar discussed the potential impact of central bank digital currencies (CBDCs) on cryptocurrencies, like bitcoin and ether, during a webinar hosted by the International Monetary Fund (IMF), local media reported on Friday.

He was quoted as saying:

We (RBI) believe that CBDCs would actually be able to kill any case that might exist for private cryptocurrencies.

By “private cryptocurrencies”, the Indian government and central bank means all non-government issued cryptocurrencies, including bitcoin and ether.

Sankar explained the central bank’s stance that cryptocurrencies should not be allowed “simply because they are backed by high technology.” He added:

Any tool that can be used for good can also be used for undesirable purposes. Technology, ultimately, 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 was finalizing a consultation paper on cryptocurrencies.

The RBI has long warned that cryptocurrencies pose a threat to India’s financial system and should never be recognized as legal tender as 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 an intrinsic value. Many cryptocurrencies that have neither are still accepted at face value – not only by gullible investors, but also by expert policymakers and academics. The official clarified:

Most cryptocurrencies have an equilibrium value of exactly zero, but their price is still sometimes at fantastic levels.

“But even where cryptocurrencies have value, for example, certain stablecoins that are pegged to a particular currency, their unchallenged acceptance seems confusing to me,” he said.

The Indian central bank is currently developing its own CBDC. The bank said this week that it would take a “graduated 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

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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