As the cryptocurrency sector continues to grow despite the occasional hiccup, not everyone agrees with the nascent asset class. Some even warn of a major financial crisis if digital assets are allowed to thrive. One such critic is Shaktikanta Das, the governor of the Reserve Bank of India, who has raised concerns about the rapid growth of crypto assets and warned, according to a Dec. 21 article in the Times of India, that it might trigger the next financial catastrophe. He declared: “These are 100% speculative operations, and I would still believe they should be prohibited because, mark my words, private cryptocurrencies will cause the next financial catastrophe if they are allowed to develop”.
In addition, Das added that the lack of crypto regulation by central banks poses a major inherent risk to countries’ macroeconomic and financial stability, as he believes the original intention of digital assets was to “bypass the system” or break the system. In addition, the head of the Central Bank of India expressed his opinion that the creators of cryptocurrencies “do not believe in the central bank currency, the regulated financial world, and all they want is to bypass and defeat the system”. As an example of this threat, he led the collapse of the crypto trading platform FTX. “I have yet to hear a serious argument regarding the public benefit they serve,” Das said in closing. It’s just speculative.
Alternative forms of CBDC
Nevertheless, the governor’s anti-crypto stance is nothing new. In July, India’s Finance Minister Nirmala Sitharaman claimed that cryptocurrencies should be banned and that the country’s central bank is pushing for a ban as she called for global cooperation. As an alternative, the central bank of India is offering an e-rupee, a central bank digital currency (CBDC) currently in the pilot phase and which the central bank governor said works like money itself, along with the Unified Payments Interface (UPI) as a payment platform. According to Das, BQ Prime reported that the CBDC would also have “self-wipe” and “auto-wipe” features, allowing users to move funds in and out of their CBDC wallets.
Public criticism in India
Meanwhile, cryptocurrency firms operating in India have slammed the RBI’s efforts to replace digital assets with a CBDC as “comparing apples and oranges,” noting that the released concept note targets a limited, conservative, and outdated central bank policy. View of cryptocurrencies. In November, Finbold reported on Anto Paroian, the CEO and chief executive of cryptocurrency hedge fund ARK36, who criticized the Indian government for considering cryptocurrencies “more of a threat than an opportunity” when they could give charities a slice of the population better access to financial services.