During a press conference at the BFSI Summit 2022, the Governor of the Central Bank of India confirmed his position on cryptocurrencies. According to him, it is cryptocurrencies that will cause the next financial crisis. How to explain such a speech?
India’s central bank opposes cryptocurrencies
Since the bankruptcy of the FTX group, politicians around the world have a more pessimistic view of cryptocurrencies. Recently, the Governor of the Reserve Bank of India (RBI), Shaktikanta Das, declared during a conference that this type of asset is only a tool of speculation without any real utility, nor intrinsic values:
“I don’t think it’s necessary to say more about our position after the events of this year, including the last episode concerning FTX. »
The man at the head of the monetary institution does not mince his words on the subject. More than a warning, he says cryptocurrencies should be bannedas they would represent an inherent danger threatening the Indian economy and its financial stability.
“In our opinion, cryptocurrencies should be banned, because if we let them expand, that is, if we try to regulate them and let them develop, believe me, the next financial crisis will come cryptocurrencies. »
In parallel, Shaktikanta Das spoke enthusiastically about Digital Central Bank Currencies (MNBC). In his words, the MNBCs represent a ” numerical revolution which India is preparing for with its digital rupee project.
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A competition between cryptocurrencies and MNBC?
This is not the first time that the Central Bank of India has issued an unfavorable opinion against cryptocurrencies. Moreover, central banks around the world generally have a pessimistic view of the sector: at the start of the month, it was the European Central Bank that discredited the Bitcoin (BTC) network by describing it as “ on the way to uselessness “.
This confrontation between monetary institutions and cryptocurrencies is motivated by their contrary objectives : while central banks want to manage the distribution of the currency of a given geographical area centrally, the ambition of the Bitcoin network is to have a decentralized monetary system without border constraints.
As the use cases related to cryptocurrencies increase day by day, central banks have had no choice but to adapt to this innovation. by investing heavily in digital currency projects. Moreover, China has already taken the plunge by launching its prototype digital yuan in 2020.
In addition, an ideological fight is underway between cryptocurrencies and central bank digital currencies : while one ensures a transparent and uncensorable system, the other defends a system with stable valuations and greater authority over the funds deployed.
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Source: The Indian Express
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Always enthusiastic about new technologies, I gradually moved closer to Web3-related activities during the year 2021. Over time, I wanted to add my stone to the building. It was then that I became an editor, with the aim of explaining cryptocurrency-related topics to as many people as possible.
Timothy Bourbotte
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