An RBI official has said that he is giving CBDCs the much-needed backing to destroy private digital assets like Bitcoin and Ethereum. The official in question is the Deputy Governor of the Bank, Rabi Sankar. He gave his opinion on digital assets and central bank digital currencies at a recent event held yesterday. The event was organized by the International Monetary Fund to look into digital assets and related products.
RBI official wary of new technologies
In his statement, the RBI official mentioned that those at the RBI believe that CBDCs will be able to kill off the competition of private digital assets. He believes that digital currency can rival crypto for use cases, thereby eliminating it in the process. India has classed Bitcoin, Ethereum, and other digital assets under private cryptocurrencies. The country has refused to grant it a legal status and does allow its issuance.
The RBI official also explained the thought process behind the reason the bank is pushing for a ban on new technologies such as digital assets. According to Sankar, new technologies are excellent for the economy but malicious actors can also take over them and use them to wreak havoc in society. In his opinion, he believes that technology can be classified as a tool to achieve the aims of the users.
Sankar puzzled over the acceptance of crypto
India has continued to come up with different ways to regulate the crypto space in the country to no avail. Some days ago, there was news that the consultation regarding digital assets was already set with a paper that will be sent out soon. The RBI has been championing the cause of eradicating digital assets from the country, with an RBI official mentioning that the country cannot afford to become like El Salvador. Notably, El Salvador became the first country to adopt Bitcoin officially as a means of exchange.
The bank also pointed out that holding digital assets could cause excess dollars in the Indian economy. Sankar noted that a currency must always needs someone to issue it or a value that can back it up. In his opinion, the RBI official feels digital assets lack both but traders and investors are still adopting them. He is also baffled at how traders continue to adopt these assets even though their equilibrium value is zero. He talked about how stablecoins could argue their case but is puzzled at how traders would adopt them without questions. The RBI is still working on a CBDC with an update scheduled to come in soon.