Crypto logical extension of fintech, its use as asset, currency a challenge

business-standard.com:

Crypto technology as a means of payment is logical extension of fintech companies but challenges lies on its usage as an asset class and an alternative to currency, Minister of State for Electronics and IT Rajeev Chandrasekhar said on Thursday.

Speaking on sidelines of Fintech Festival, Chandrasekhar said the whole world is grappling with the issue of crypto and has to come to an understanding on the ways and means to address it.

"Crypto as a means of payment is logical extension of fintech but crypto as an asset class and crypto as a substitute for currency is an area with which all currencies of the world and all regulators of the world are struggling with. We will find our way with prudence, caution. We have completely clear objective as to who will do crypto in India. The government has said that RBI will do crypto the digital rupee as first measure and then we see how market evolves," Chandrasekhar said.

Finance Minister Nirmala Sitharaman has said that the RBI has expressed concerns over cryptocurrencies noting that they should be prohibited as they can have destabilising effect on the monetary and fiscal stability.

She said the RBI had registered its concern over the adverse effect of cryptocurrencies on the Indian economy.

The RBI mentioned that cryptocurrencies are not a currency because every modern currency needs to be issued by the central bank or the government, she said.

Further, she said, the value of fiat currencies is anchored by monetary policy and their status as legal tender. However, the value of cryptocurrencies rest solely on the speculations and expectations of high returns that are not well anchored, so it will have a destabilising effect on the monetary and fiscal stability of a country.

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