The Reserve Bank of India is keeping up the ante against cryptocurrencies. On Friday, RBI deputy governor T Rabi Shankar termed stablecoins a risk to policy independence.
Stablecoins are cryptocurrencies whose value is tied to another currency, commodity or financial instrument.
“Private virtual currencies and stablecoins pose risks of dominance of a few currencies which will impede the ability of emerging market countries such as India to manage their external sectors or maintain policy independence. The inherent flaws, vulnerability and risks posed by stablecoins outweigh their purported benefits,” said the deputy governor, who virtually attended the Indo-Pacific Economic Conclave of the Bengal Chamber of Commerce and Industry.
Rabi Shankar also said that the high cost of remittances for countries despite the available technology was “unconscionable”, and India is in talks with more jurisdictions to make a material impact on cross-border payments. “According to the World Bank’s remittance prices worldwide database, the global average cost of a retail size of remittance (retail size - $200) was 6.2 per cent (of the amount sent) in the fourth quarter of 2022. This cost can be as high as 8 per cent for some countries.”
“I believe that the present situation is not sustainable given the available technology,” he said. In February this year, India and Singapore enabled the UPI-PayNow linkage to enable users in either country to make convenient, safe, instant and cost-effective cross-border transfers using their respective mobile apps.
“We have followed up on this in July by signing an MoU with the Central Bank of the UAE (for) cooperation regarding interlinking on mutual payments and messaging systems, among other things,” Sankar added.“We are in talks with some other jurisdictions to make a material impact on the high cost of remittances,” he said.
The conclave was being held on the occasion of the 169th annual general meeting of the Bengal Chamber of Commerce and Industry where Goutam Ray, executive director (HR & Admin) CESC Ltd was announced as the president of the chamber.
