According to Chief Economic Adviser V. Anantha Nageswaran, the development of a Central Bank Digital Currency, CBDC will not ban cryptocurrencies and stablecoins because they serve different purposes.
“Will CBDC be able to put a stop to cryptos, let alone stablecoins? My response is no to both of these questions because the primary goal of cryptos is…basically, tax evasion, money laundering, and speculation. CBDC, on the other hand, is certainly not a vehicle for deception and speculation “he stated.
“As a result, neither stablecoins nor cryptos will go away in the face of CBDCs because they serve different purposes. As a result, they must be dealt with independently using distinct regulatory mechanisms. The introduction of CBDC will not eliminate the necessity for regulatory tools “according to the consultant
‘Getting Central Bank Digital Currency (CBDC) Right for India: Lessons from the G20 and the Rest of the World,’ said Nageswaran at a webinar hosted by the Indian Council for Research on International Economic Relations.
The government attempts to explain its stance on private cryptocurrencies, the Reserve Bank of India (RBI) has stated unequivocally that it is opposed to them. Meanwhile, the central bank is working on its own CBDC, which might be implemented this year.
“As (RBI Deputy Governor T. Rabi Sankar) Rabi Sankar put it, “there is really little actual proof and actual experience to be able to fine-tune and launch” (a CBDC). Right now, there’s also a feeling – if I may say so – that we shouldn’t fall behind in this because we’ll be seen technologically behind if we do “Nageswaran voiced his opinion.
The speed with which central banks, including the RBI, have been working on digital currencies is partially owing to “group dynamics,” according to Nageswaran.
Finance Minister Nirmala Sitharaman remarked that once the ongoing consultation process is done, the government will publish its position on cryptocurrencies.
“Consultations are now taking place, and you are welcome to take part. The ministry will most likely sit down and think about it when the consultation process is through, which is crucial because we need the executive to guarantee that they are not infringing any rules. After that, we’ll state our viewpoint on the subject.” Sitharaman said.
On March 8, Ashish Singhal, the founder, and CEO of cryptocurrency trading website CoinSwitch addressed the minister with a question during the India Global Forum in Bengaluru.
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