Rabi Sankar, deputy governor of RBI, has taken a strong viewpoint against virtual currency referring to it as destabilizing impact, it may have on India’s fiat currency.
He even compared cryptocurrency to Ponzi procedures and said that prohibiting them, not governing them, would be a great choice for the Indian administration. He further said they have also seen that virtual currencies are not amenable to an explanation as a currency, asset or product. Virtual currencies are not currencies, monetary investments or real investments or even digital investments. Hence, it cannot be governed by any financial sector controller. It is not probable to govern something indescribable, Rabi Shankar, the deputy governor of RBI said.
Sankar thinks that governing crypto would finally be accepting its usage as a stock of value and even a currency. Just governing it could be akin to enabling its usage within the stand laid out by the state. Nonetheless, he concedes that some people will however use crypto if it is prohibited like drug trafficking is widespread happening instead of the prohibition. He also pointed out that authorizing virtual currency to prevail in a fiat-monopolized ecosystem is bound to have a destabilizing impact on the financial and fiscal vitality of India. If crypto is governed so that it can be used as an investment asset, Sankar said that its utility will surge as a stock of value, and could bring out more users away from the Rupee.
Sankar fired on the true significance of cryptocurrencies by announcing that not like the value of rupee, which is attached by financial policy and its importance as valid tender, the value of crypto assets stretches solely on the expectation that others will also find valuable and use them. The Indian government has been researching its abilities in deploying a central bank digital currency (CBDC). Recently, Nirmala Sitharaman, Finance Minister of India said that she would not shortly decide whether to legalize or ban crypto. She disclosed that she is expecting to launch a digital rupee program by 2023 to stimulate economic growth.