RBI Official: Central Bank Digital Currencies Could Kill Cryptocurrencies

Rabi Sankar, Deputy Governor of the Reserve Bank of India (RBI), believes that central bank digital currencies could “kill whatever little case there could be” for cryptocurrencies, like bitcoin and ether. RBI Deputy Governor Discusses the Impact of CBDCs on Cryptocurrencies At a webinar hosted by the International Monetary Fund (IMF), RBI Deputy Governor T. Rabi Sankar discussed the potential impact of central bank digital currencies (CBDCs) on cryptocurrencies such as bitcoin and ether, according to local media. According to reports, he said: “We (RBI) believe that CBDCs would be able to kill whatever little case there could be for private cryptocurrencies.” He stated that the RBI has been working “methodically” to develop a digital version of the fiat rupee, citing benefits such as better currency management, lower settlement risk in the system, particularly the interbank system, and the best solution for cross-border payments. The RBI is cautious because there is little foreign experience with CBDCs and their influence on the banking system in terms of banks’ ability to mobilize deposits and impact monetary policy transmission. He said, “We will go through the proofs of concept, then pilots, and then a stage-wise introduction. We intend to learn as we go, as all of us realize the digital journey is precisely that; it’s a journey that never has an end.” Government And Regulator-Led Process Sankar went on to say that a gover...