Shakktanta Das says the next major financial crisis could be caused by private cryptocurrencies if they are not banned. This is the governor of the Reserve Bank of India and launched a digital rupee test on December 1.
Difference between private and public cryptocurrency
It differentiates between private and public cryptocurrencies and highlights the tension. Central banks, of course, support their own public cryptocurrencies such as the digital euro or, in this case, the digital rupee.
Private cryptocurrencies refer to all digital currencies that are not issued by central banks. Even Bitcoin, the ultimate decentralized digital currency, is a private cryptocurrency by central bank definition.
central bank cryptocurrency
Yesterday, Shakktanta Das spoke at Business Standard’s online banking and finance event. He says the term private cryptocurrency is used in India to distinguish it from its own CBDC, which stands for central bank digital currency.
The Reserve Bank of India launched another pilot project for its CBDC this month.
About private cryptocurrencies:
They have no underlying value. They pose huge inherent risks to our macroeconomic and financial stability. I have yet to hear a credible argument for what public interest or purpose it serves,” he said.
Rules are not enough, crypto must be banned
The head of the central bank said mere regulation and the growth of the crypto industry would not be enough to avoid financial catastrophe.
“Believe me, the next financial crisis will come from private cryptocurrencies…” He continues: “Such tokens are only used for speculation.”
Therefore, he thinks it is not enough to regulate the cryptocurrency industry, Das says a complete ban on cryptocurrencies in India would be the best approach:
“It’s 100% speculative activity and I still think it should be banned.”
The governor of the central bank points to the demise of crypto exchange FTX and the role of Sam Bankman-Fried.
“I don’t think we need to say more about our position after last year’s developments, including the recent FTX episode.”
reasoning is wrong
And here the president’s reasoning is wrong. The FTX case is nothing but the case of a big company doing something with crypto. This is not because cryptocurrencies are inherently bad or risky, but because of (deliberate) incompetence at the top of the business.
This says that cryptocurrency is nothing but speculation, but real speculation dares to say that cryptocurrency will cause the next financial crisis. Much of the global economy is on the verge of or in the middle of a recession, and it’s not because of cryptocurrencies.
Bitcoin was introduced in 2009 during a financial crisis to provide an alternative and a way out.
digital rupee
But the president is not optimistic about standalone digital money, praising his own central bank’s digital currency and insisting that the central bank is doing everything it can to get its digital rupee off the ground.
“You will see in the coming days that more and more central banks will embrace digital currencies and India is at the forefront of the digital revolution of the current century.”
Source: Btc Direct
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Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
