Cryptos and a CBDC are not the same thing
Recently in the budget speech, Finance Minister said that Cryptocurrency will be discouraged via taxation and capital gains provisions.RBI governor also mentioned that cryptocurrecny has no underlying asset not even a tulip.
RBI’s concern regarding cryptos
- Threatens RBI’s position- The proliferation of cryptos threatens the RBI’s place in the economy’s financial system.
- Unregulated-This threat emerges from the decentralised character of cryptos based on blockchain technology which central banks cannot regulate.
- Facilitate Illegality- They have been facilitating the flight of capital and illegality in spite of pressures from powerful nations.