RBI Governor Shaktikanta Das Criticizes Stablecoins and Cryptocurrencies at G30 Seminar

RBI Governor Shaktikanta Das Criticizes Stablecoins and Cryptocurrencies, Praises CBDCs at G30 Seminar

Reserve Bank of India (RBI) Governor Shaktikanta Das made headlines at the G30 39th Annual International Banking Seminar in Washington DC on Sunday, where he expressed his discomfort with the idea of stablecoins and other cryptocurrencies dominating the payment system. Das emphasized the importance of maintaining the sovereignty of local governments and raised concerns about the potential risks associated with private currencies.

Das praised the concept of Central Bank Digital Currencies (CBDCs) as the future of fiat currencies, highlighting India’s positive response to CBDC pilot projects. He questioned the dominance of stablecoins in the payment ecosystem, stating, “Stablecoin is private money, are we comfortable allowing it to dominate the payment ecosystem or we should let fiat currency issued by sovereign governments to do the same.”

The RBI Governor also highlighted the settlement risk associated with fiat currency, emphasizing the finality and government backing of CBDCs. He expressed his reservations against stablecoins, citing the potential for multinational companies to dominate the payment ecosystem and undermine the sovereignty of local governments.

Das praised CBDCs as the future of paper money, emphasizing their potential for faster trans-national payments. He mentioned India’s success with the United Payment Interface (UPI) and the interoperability between UPI and CBDCs. India has been conducting pilot projects on CBDCs for the past two years and has received a positive response.

While India remains unregulated in terms of cryptocurrency, the government is deliberating on a discussion paper on crypto regulations. There have been reports suggesting a possible ban on crypto to promote CBDCs. Das stressed the importance of running trials and ensuring the security and robustness of CBDCs before a nationwide rollout.

As the debate on the future of digital currencies continues, Das’ comments at the G30 seminar have sparked discussions on the role of stablecoins, cryptocurrencies, and CBDCs in the global payment ecosystem. Readers can watch the full conference on Youtube for more insights into the future of digital currencies.