Central Bank Digital Currency

Mr. Shaktikanta Das, Governor of the Reserve Bank of India (RBI), recently shared the thoughts of the Indian Government regarding all private cryptocurrencies. "RBI is very clear that all the private cryptocurrencies should be banned", he asserted at an event in mid-January 2023.

Though he mentioned that private cryptocurrency should be banned, he also said that the blockchain technology on which it is based needs to be supported.

The RBI governor also clarified that, apart from the known dangers of money laundering, terror funding, etc., there is no underlying in the case of crypto. He added that "anything without any underlying, whose valuation is dependent entirely on make-believe, is nothing but 100% speculation or, to put it bluntly, gambling".

Mr. Das stated, "If 20% of the transactions occur in crypto that the central bank does not issue, the RBI will lose control over 20% of transactions in the economy. The central bank's ability to decide monetary policy and the money supply level will get undermined. This will lead to dollarization of the economy."

RBI's concern and, similarly, the concern of central banks of all other countries that are exploring or introducing CBDC in their respective economies is more to do…