Central Bank digital currencies can kill case for cryptos

Ahead of the government coming out with a consultation paper on cryptocurrency, Reserve Bank Deputy Governor T Rabi Sankar on Thursday said the destined to-be-introduced central bank digital currencies (CBDCs) can “kill” whatever little case that exists for private virtual currencies like Bitcoin.

Sankar likewise went after ‘stable coins’ which are pegged to a particular currency.

The RBI has been vehemently against digital currencies like Bitcoin, saying there is no underlying value for such instruments which are essentially speculative in nature. It has gone public with the same, even as the government presently can’t seem to make its position clear.

Recently, the Department of Economic Affairs in the Ministry of Finance had said it will soon be coming out with a paper on such private cryptocurrencies.

“We believe that CBDCs might really kill what small amount case that could be for private cryptocurrencies,” Sankar said while talking at a class coordinated by the IMF.

He said the RBI has been working “deliberately” to present a digital version of the fiat rupee and sees benefits like better cash for the executives, reducing settlement risk in the system especially the interbank system, and as the best solution for cross-border payments.