Just days after India’s central bank back a ban on the crypto sector, again, Raghuram Rajan gave a nod to the thought that the underlying technology behind cryptocurrencies must be explore.
Speaking in Davos at the World Economic Forum (WEF), the former governor of the Reserve Bank of India (RBI) said that while the crypto sector had face deserve scrutiny and decline, the technology driving digital assets like cryptocurrencies were an enticing next-gen fintech tool that could be experiment with.
A famed economist, Raghuram Rajan serve as the 23rd chief of the RBI between 2013 and 2016.
Raghuram Rajan Said :
“I don’t think you want to rule out this technology and say it has failed as a speculative asset. I think it’s had its comeuppance. But I think as a technology, I don’t think we’ve seen the limits of it,”.
The global crypto industry slip into a major downfall and drop from its trillion-dollar valuation to as low as a little below $800 billion (approx. Rs. 65,20,496 crore) in the second half of 2022.
Promising crypto projects like Terra and FTX suffer liquidity crunches and dramatically fell apart, leaving investors high and dry.
In addition, plethora of hack attacks scare a big part of the remaining investors away.
In the backdrop of these circumstances, crypto firms as establish as Binance also resort to announcing staff cuts.
A number of firms, including Celsius and Voyager also declare bankruptcies.
The governments of many nations, including India, are currently working to regulate the digital assets industry and safeguard it against market turbulences.
As per Raghuram Rajan, the crypto players must refrain from advertising these assets as an ‘inflation-resistant’ alternative to the already existing fiat currencies.
Instead, Raghuram Rajan said, people must work on developing crypto’s underlaying blockchain technology.
Raghuram Rajan has reportedly already clarified that, for now, he does not see any large scale uses for the crypto sector.
Raghuram Rajan Said :
“The notion that these are stable forms of payment relative to the fiat currencies, the central bankers cannot be trusted but this crypto can be trust, belongs to a small minority of people. So broadly I am saying there is no large-scale use case at present; there are niche use cases.”
RBI’s present governor Shaktikanta Das said that investing in crypto was the same as gambling.
“Every asset, every financial product has to have some underlying (value) but in the case of crypto there is no underlying and the increase in the market price of cryptos, is based on make-believe.
So anything without any underlying, whose value is dependent entirely on make-believe, is nothing but 100% speculation or to put it very bluntly, it is gambling,” Shaktikanta Das, while backing a ban on crypto, was quoted as saying.
India will get its annual budget for this year in February and guidelines around engaging with the crypto sector are expect for over a year now.
As for now, crypto trading is allow and tax in India.
DISCLAIMER : Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by 2YoDoINDIA. 2YoDoINDIA shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.
