Raghuram Rajan Said Bitcoin Has a Place with CBDCs
Raghuram Rajan is known for predicting the 2008 recession in 2007 and spearheading India’s economic recovery over the past decade who is currently a finance professor at the University of Chicago.
On Thursday, he told CNBC that he had seen the benefits of working as a former RBI governor Raghuram Rajan and the Reserve Bank of India (RBI) and saw the potential of the digital currency as an alternative to traditional financial institutions.
Continuing this he concluded that Bitcoin’s long-term prospects are positive, but not a substitute for the currency, he said. Bitcoin is “somewhat like gold” and the “long-term outlook for Bitcoin” is positive, but “no substitute for traditional financial institutions.”
Further, he added and said that Gold is indeed valuable if you value it as jewelry, but you cannot, and it still has no value, while others think it has value.
Bitcoin has the potential to prove to be just an asset and a speculative asset. He added that a stable coin supported by different currencies would serve as an alternative to gold, silver, and other precious metals such as gold and silver coins.
Although seeing the situation and potential release, the former banker expressed confidence that the central government will track user data when a digital government currency is eventually introduced. Libra is perhaps the kind of money that is used more for transactions, “Rajan said.
Rajan also reflected on the current benefits of using cash and expressed concerns about how digital currencies will work once they are introduced. The beauty of the money in your hand is that it is anonymous. Still, if someone uses foreign digital currency to buy certain services that could endanger them, they could commit espionage or extortion. Rajan was asked what the country will do with the data collected from abroad about those who use its currency. Even if we don’t do anything illegal, we want the government to see everything we do, “he said.
Rajan also raised concerns about bitcoin as a currency alternative, citing its volatility as a significant cause for concern. He has been a supporter of digital currencies for years and told a conference in 2015 that their rise was inevitable. Rajan raised legitimate but perhaps underestimated questions when he anticipated the impact of Bitcoin’s volatility on the global financial system and its implications for monetary policy. It’s a concern that’s not far away – in today’s world, “he concluded.
