Introduce a digital currency soon, says Garg

What is the News?

According to former finance secretary Subhash Chandra Garg, the Reserve Bank of India (RBI) must expedite the floating of the Central Bank Digital Currency (CBDC) or should collaborate with other nations for an international digital currency.

What are Former Finance Secretary views on Cryptocurrency?

Cryptocurrency is indeed the future and the technology is robust. But he expressed doubts over whether the private cryptocurrencies would stay relevant in the future.

This is because governments will soon come up with a digital currency. Once the official digital currency comes in, most private currencies, including stable coins, will disappear.

Further, on physical currency, or notes, he said that it will continue to survive as it is difficult to implement changes in one go in a country like India.

Moreover, he favoured bringing in a cryptocurrencies transactions law on the lines of securities contract transactions to regulate assets platform services of cryptocurrencies and not for every cryptocurrency.

What are Stablecoins?

Stablecoins are a form of cryptocurrency. However, unlike Bitcoin and other speculative coins, stablecoins are nominally pegged to fiat currencies such as the dollar in order to limit price fluctuations. This stability has made them the currency of choice for buying other cryptocurrencies.

But the stablecoins are still privately held, something that poses a systemic challenge.

Source: This post is based on the article “Introduce a digital currency soon, says Garg” published in Business Standard on 22nd October 2021.