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Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar says central bank digital currencies could \u201ckill whatever little case there could be\u201d for cryptocurrencies, like bitcoin and ether.<\/strong>\n<\/p>\n \n He was quoted as saying:\n<\/p>\n We (RBI) believe that CBDCs would actually be able to kill whatever little case there could be for private cryptocurrencies.<\/p>\n<\/blockquote>\n \n Sankar explained the central bank\u2019s stance that cryptocurrencies should not be permitted \u201cjust because they are backed by hi-tech.\u201d He added:\n<\/p>\n Any tool that can be used for good can also be put to undesirable uses. Technology, at the end of the day, is a tool.<\/p>\n<\/blockquote>\n \n The RBI has long warned about cryptocurrencies being a threat to India\u2019s financial system and should never be recognized as legal tender like some countries, including El Salvador, have done. The bank also warned that crypto could lead to the dollarization<\/a> of the Indian economy.<\/p>\n Sankar detailed: \u201cA currency needs an issuer or it needs intrinsic value. Many cryptocurrencies which have neither are still being accepted at face value \u2013 not just by gullible investors but also by expert policymakers and academicians.\u201d The official elaborated:\n<\/p>\n Most cryptocurrencies have an equilibrium value of exactly zero, but they are still priced sometimes at fantastical levels.<\/p>\n<\/blockquote>\n \n The Indian central bank is currently developing its own CBDC. The bank said this week that it will take a \u201cgraded approach<\/a>\u201d to launching the digital rupee.<\/p>\nRBI\u2019s Deputy Governor Discusses Impact of CBDCs on Cryptocurrencies<\/h2>\n
\nRBI Deputy Governor T. Rabi Sankar talked about the potential impact of central bank digital currencies (CBDCs) on cryptocurrencies, like bitcoin and ether, at a webinar organized by the International Monetary Fund (IMF), local media reported Friday.<\/p>\n\n
\nBy \u201cprivate cryptocurrencies,\u201d the Indian government and the central bank refer to all non-government-issued cryptocurrencies, including bitcoin and ether.<\/p>\n\n
\nMeanwhile, the Indian government is still working on the country\u2019s crypto policy. This week the economic affairs secretary revealed that the government is finalizing<\/a> a consultation paper on cryptocurrencies.<\/p>\n\n
\n\u201cBut even where cryptocurrencies do have value, for example, some stablecoins that are pegged to a particular currency, their unquestioned acceptance seems puzzling to me,\u201d he opined.<\/p>\n