Kolkata: former reserve bank of india (RBI) Governor duvvuri subbarao has said that the central bank may lose control of the money supply and inflation management if cryptocurrency allowed in the country.
Speaking at a webinar organized by the National Stock Exchange (NSE) and the New York University (NYU) Stern School of Business, Rao also said that India’s case for issuing a central bank digital currency (CBDC) may not be strong because There are capital controls.
“Crypto is backed by algorithms and there are fears that the central bank may lose control of the money supply and inflation management. There are also concerns that crypto Will disrupt monetary policy,” he said on Wednesday.
“Crypto capital can jump out of control; fiat currency is tied to reserve currency,” he said.
Rao, who was RBI governor from 2008 to 2013, said CBDCs also need stronger data protection laws.
According to him, cash withdrawals are taking place in India and digital payments are becoming popular.
However, Rao said that due to the pandemic, currency circulation has increased as people had cash with them due to the lockdown. “The role of the central bank as the lender of last resort should not be hindered.”
Speaking at a webinar organized by the National Stock Exchange (NSE) and the New York University (NYU) Stern School of Business, Rao also said that India’s case for issuing a central bank digital currency (CBDC) may not be strong because There are capital controls.
“Crypto is backed by algorithms and there are fears that the central bank may lose control of the money supply and inflation management. There are also concerns that crypto Will disrupt monetary policy,” he said on Wednesday.
“Crypto capital can jump out of control; fiat currency is tied to reserve currency,” he said.
Rao, who was RBI governor from 2008 to 2013, said CBDCs also need stronger data protection laws.
According to him, cash withdrawals are taking place in India and digital payments are becoming popular.
However, Rao said that due to the pandemic, currency circulation has increased as people had cash with them due to the lockdown. “The role of the central bank as the lender of last resort should not be hindered.”
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