Last updated on September 27, 2023 1:45 am
The debate continues in the country to bring cryptocurrencies like bitcoin under the purview of regulations. The government is in the process of bringing a bill for this in the current session of Parliament. Meanwhile, former Reserve Bank of India (RBI) governor D. Subbarao says that if cryptocurrencies like bitcoin are approved in the country, the central bank will help in money supply and inflation management. inflation management).
Addressing a webinar organized by the National Stock Exchange (NSE) and the New York University Stern School of Business, Rao also said that the case for issuing a central bank digital currency (CBDC) in the country may not be strong as it has a capital control aspect. is included. “Crypto runs algorithmically and there are fears that the central bank may lose control over the money supply and inflation management,” he said on Wednesday. There are also concerns that crypto will disrupt monetary policy.
Rao, who was RBI governor from 2008 to 2013, said CBDCs also need stronger data protection laws. He said that the trend of cash is decreasing in the country and digital payments are becoming popular. However, he also said that currency circulation has increased due to the epidemic as people had deposited cash due to the lockdown. He said the role of the central bank as a last-resort lender should not be affected.
It is noteworthy that RBI is opposing the recognition of cryptocurrencies in the country. It has conveyed its concerns to the government. Reserve Bank Governor Shaktikanta Das says the central bank is “seriously” concerned about cryptocurrencies like bitcoin and has conveyed this concern to the government. He says that now the government has to take a decision in this matter. Private cryptocurrencies like bitcoin are not subject to regulation. Its price fluctuates greatly. The government has to decide whether to allow them completely or not.