Mr. Das attended the 39th International Banking Seminar in Washington DC and made a powerful statement. Stablecoins are seen as a threat to India’s sovereignty in managing its monetary system. Speaking at a G30 event, Das said he had “very strong concerns” about stablecoins posing a new threat to national monetary systems.
The governor said that stablecoins, which are centralized digital currencies backed by fiat currencies, are private money, creating “low reverse repo rates” and weakening India’s payments infrastructure by privatizing the government’s role in the payments system. It was pointed out that this could cause confusion. As if to suggest that all companies should adopt stablecoins, Das points out that in contrast to the theoretical benefits of using stablecoins, many of these assets It highlights the flaws.
However, Das promoted central bank digital currencies (CBDCs) as an alternative to FIDs, believing them to be safer and more reliable. Das praised CBDC assets, noting that CBDCs are government-issued, offer guaranteed payments without collateral, and are more secure than privately issued stablecoins.
RBI promotes CBDC pilot program, aiming for widespread implementation with a view to integration with UPI
He also reported on the status of CBDC in India, which was piloted in December 2022 and received positive response. The Central Bank of India’s digital rupee experiment with 16 participating banks is implementing various use cases such as offline retail transactions and programmable money, further empowering the unbanked/underserved masses. We aim to provide the following. “The explicit programmability of CBDCs could be a game-changer,” Das said, adding that targeted capital distribution mechanisms will play a central role in meeting India’s financial inclusion agenda. added.
Apart from the benefits of CBDC, the Reserve Bank of India governor also unveiled plans to link the digital rupee to the Unified Payments Interface (UPI), where Indian consumers conduct over 500 million transactions every day. Das also stressed that the Indian government is not in a hurry to implement the digital rupee and will conduct several trials over time to ensure the final outcome is successful.
Das’s comments come in the wake of reports that India is considering further banning private cryptocurrencies such as stablecoins. Just a week ago, two unidentified officials told local media that Indian representatives, in consultation with other authorities, had determined that private cryptocurrencies pose a risk of overshadowing their benefits. I told him that I did.
India is preparing a policy document setting out the government’s position on virtual currencies, including stablecoins. The world will be watching closely as India tops the Chainalysis Global Cryptocurrency Adoption Index despite many challenges such as a harsh regulatory environment and strict taxation of cryptocurrencies. It will be.
Therefore, the RBI seems to be quite cautious about India’s monetary independence. We approach CBDCs by intelligently evaluating their fundamentals, while proactively responding to the challenges posed by the rapidly evolving digital asset landscape.
