Raghuram Rajan, the former governor of the Reserve Bank of India, stated that just a “handful” out of a total of 6,000 cryptocurrencies in circulation today will survive in the future. Rajan compared the Cryptocurrency frenzy to the Dutch tulip fever in the 17th century, saying that people retain cryptocurrencies only for two reasons, a store of wealth and an asset having the chance to appreciate and use the payments.
He questioned, is it vital to have 6,000 cryptocurrencies for payments? Even if this tech world is so helpful that it can replace cash and money, just one or two, perhaps a handful, will survive to be used for payments. As a result, hardly a few of the cryptos will exist with high prices in the future.
This remark from the former governor came after the government’s statement over banning private cryptos and introducing its regulated crypto. The Cryptocurrency and Regulation of Official Digital Currency Bill-2021 will be introduced in the parliament’s upcoming winter session.
Rajan feels that these private cryptos are just like unregulated chit funds posing similar problems to the economy. The upcoming bill will create a proper framework to make an official digital coin issued by the RBI.
There is currently no rule in the country regarding cryptocurrencies. There are signs that harsh regulatory measures may be enacted to address the issue. In light of this, Prime Minister Narendra Modi met with senior officials earlier this month to discuss about cryptos.
BJP member Jayant Sinha organized Standing Committee on Finance and crypto representatives by deciding not to ban private cryptos but to regulate them. On the other hand, RBI has long mentioned its stand against cryptocurrencies stating they can be dangerous for the macroeconomic and other economic standards.