CBDCs To Kill Private Cryptos, Indian Central Bank Warns

The Indian Cryptocurrency market has been dealing with many restrictions lately. Finance Minister Nirmala Sitharaman announced the 30% tax over the profit made from the digital assets trading in this year’s Union Budget. However, she also mentioned the launch of the Central Bank Digital Currency (CBDC) backed by the government. Meanwhile, Deputy Governor of the Nation’s Central Bank has laid a warning for the private crypto tokens.

RBI maintains negative stance

Rabi Sankar, newly appointed Deputy Governor of the RBI mentioned that the launch of CBDC might eliminate the logic of private cryptocurrencies’ existence. Sankar gave out this statement in a webinar organized by the International Monetary Fund (IMF).

The Reserve Bank of India has been a big opposer to Cryptocurrency. He extended the authority’s stand over private digital assets use in the nation. Sankar said that it shouldn’t be permitted just because they are backed by hi-tech. Technology is a tool and it can be used for good however it can also be utilised for undesirable use. An understanding of its limitations is required in order to protect the citizens, he added

Digital assets carry zero value

RBI’s latest assertion has landed ahead of soon to be released Consultation paper on crypto. The Indian government recently had a discussion with IMF and World Bank over it. After the recent, crypto crash initiated by the collapse of TerraUSD and LUNA, the authority seems to be taking one step at a time.

Meanwhile, the government is yet to introduce the much awaited cryptocurrency bill. However, the Central bank has maintained its long running stance. It believes that crypto can prove to be a major threat to the financial system.

Sankar said that many digital assets carry zero value but they are still measured at a fantastical price level. They are still being accepted at their face value by many big policymakers and academicians.