RBI Deputy Governor: Unbacked Cryptos Have No Value, Stablecoins Threaten Sovereignty
Reserve Bank of India Deputy Governor T Rabi Sankar has issued a stark warning, stating that unbacked cryptocurrencies possess no intrinsic value and that stablecoins risk undermining the policy sovereignty of nations.
Key Takeaways
- Unbacked cryptocurrencies have no intrinsic value and create financial instability.
- Stablecoins pegged to foreign currencies can threaten a nation’s monetary policy control.
- The RBI continues to advocate for its Central Bank Digital Currency (CBDC) as a safer alternative.
A Strong Stance on Crypto Risks
Speaking at a conference, Sankar clarified that while the underlying blockchain technology holds promise, cryptocurrencies without asset backing are dangerous. He was unequivocal in his assessment, stating, “Unbacked cryptos have no value. They are a recipe for financial instability.”
The Specific Threat of Stablecoins
The Deputy Governor singled out stablecoins, which are pegged to traditional fiats like the US dollar, as a particular concern for emerging economies. He warned, “Stablecoins can undermine the monetary policy sovereignty of nations, especially emerging economies.”
RBI’s Consistent Position and the CBDC Push
This reinforces the RBI’s long-standing critique of private cryptocurrencies. The central bank is actively developing and promoting its own as a more secure and regulated digital payment solution.
Sankar’s remarks arrive as global regulators intensify their scrutiny of the crypto market, seeking frameworks to manage its growth and associated risks.
