Reserve Bank's digital currency plan generates mixed response
The Reserve Bank of India’s plan for a central bank digital currency (CBDC) has generated a mixed response from digital currency exchanges.
These exchanges hope the existing cryptocurrencies can co-exist with CBDC, with the RBI currency getting traded on their platforms. They are also seeking clarity on regulations around crypto assets .
Some observers also see a limited upside in CBDC in an already robust digital payments ecosystem.
“It is a great step forward in building a completely digital economy and we believe other crypto assets can also co-exist with this digital currency. It is the regulation of other crypto assets that will benefit investors, businesses and the economy,” said Avinash Shekhar, co-CEO of Zebpay.
“We believe the Indian government will come up with clear regulations around crypto assets and it will be a well calibrated one after discussion with various stakeholders. We are optimistic that the government will come up with guidelines that allow all Indians to participate in this technological revolution,” Shekhar said.
“This is a significant development for the global crypto space and is great news for crypto exchanges and investors in India. With countries like Russia and China also making similar moves, the launch of our country’s own CBDC accords India the leadership position in this space,” a Coin DCX spokesperson said.
With CBDC promising a lower volatility while offering the same promise as that of crypto-assets, exchanges will be eager to include them as part of their portfolio, the spokesperson said.
Sathvik Vishwanath, CEO and co-founder Unocoin: “Different countries have different infrastructure when it comes to domestic payments and we have a very robust stack already provided by the RBI. This means the advantage that we can get out of CBDC is limited.”
He said 80 per cent of countries have a poor payment structure where crypto-currencies are making the transactions free and fast, which explains the high value of the crypto-currencies.
“In India, we can take advantage of this value growth by participating through investing in them. CBDC does not seem to be the need of the hour in India in any way,” said Sathvik Vishwanath, CEO and co-founder Unocoin.
The RBI, however, has questioned the need for having private virtual currencies (VCs). “Developing our own CBDC could provide the public with uses that any private virtual currencies can provide and to that extent might retain public preference for the Rupee. It could also protect the public from the abnormal level of volatility some of these VCs experience,” RBI deputy governor T Rabi Sankar had said last week.