Reserve Bank of India Predicting the Future of Bitcoin
The Deputy Governor of the Reserve Bank of India (RBI), R. Gandhi, gave a keynote address last week at a fintech conference stating that Bitcoin has value and is eliminating currency. However, he also gave several reasons why digital currencies that are not backed by the government will fail to achieve mass adoption.
Fintech players, leading bankers, technology experts, and policymakers gathered last Wednesday in Mumbai at the conference called Picup (Platform for Innovation and Collaboration with Upcoming and Promising) Fintech 2017. The event was organized by a collaborative effort of IT industry body Nasscom, industry chamber Ficci, Indian Banks’ Association (IBA), and the Boston Consulting Group (BCG).
Bitcoin is Eliminating Currency
The Deputy Governor opened the event with a 20-minute inaugural address. He discussed fintech, crowdfunding, blockchain technology and Bitcoin, with the general subject of digital currency taking up the latter half of his speech.
Gandhi introduced Bitcoin by giving a short history of its origins, explaining that the digital currency is rooted in “anarchist philosophy”. He then outlined a few previous attempts at a stateless digital currency from the Cypherpunks movement mentioning May, Back, Dai, and Szabo by name before noting that:
“Bitcoins have acquired value. They are being used for settling varieties of economic transactions. People are using them as investment also. And a store of value. So currency is being eliminated.”
Bitcoin, a Pipe Dream?
We can see that in these types of virtual currencies, there is no central bank or monetary authority”, he expressed. “They pose potential financial, operational, legal, customer protection and security-related risks”. The anonymous nature of Bitcoin will also frighten them, he claimed.
Despite admitting that bitcoin has eliminated some amount of currency, the central bank governor said: “It may remain a pipe dream that blockchain will eliminate currency by ushering in virtual currency. It is unlikely”.
Author: Ritika Sharma