Former RBI governor Raghuram Rajan warned most exciting cryptocurrencies will perish | Raghuram Rajan warns about cryptocurrencies! Said- Most cryptocurrencies will end in the coming time

Photo: PTI

Former RBI governor Raghuram Rajan warned most exciting cryptocurrencies will perish

Highlights

  • Rajan believes that cryptocurrencies will only survive one or two, or at most a handful.
  • Most cryptocurrencies exist because only fools want to buy them: Rajan
  • Chit funds take money from people and they go bankrupt. Many people who own crypto assets are suffering and

New Delhi: In the winter session of Parliament, the government is going to introduce a bill related to cryptocurrency, but before this, former RBI governor Raghuram Rajan has made a big statement regarding cryptocurrency. In his interview to CNBC, Rajan said that most of the existing cryptocurrencies will soon be exhausted. There are about 6000 cryptocurrencies in existence right now and Rajan believes that only one or two, or at most a handful, will survive. Rajan said it was a ‘bubble’. Most cryptocurrencies exist simply because only stupid people want to buy them.”

Rajan says that cryptocurrencies can have the same problems as chit funds. “Chit funds take money from people and they go bankrupt. A lot of people holding crypto assets are going to suffer.” Rajan further argued that most cryptocurrencies exist only because foolish people want to buy them. A sudden jump in their prices also attracts such investors. He added that most cryptos do not have lasting value, but can maintain their presence by delivering good returns.

Government to introduce cryptocurrency related bill in winter session of Parliament

In the winter session of Parliament, the government is likely to introduce a cryptocurrency-related bill that seeks to ban private cryptocurrencies and create a framework for regulating digital currency issued by the RBI. According to the Bulletin of the Lok Sabha, the Cryptocurrency and Official Digital Currency Regulation Bill 2021 is listed in the list of bills to be introduced in the lower house during the winter session of Parliament. The bill seeks to create a supporting framework for the creation of an official digital currency issued by the Reserve Bank of India. The proposed bill seeks to ban all types of private cryptocurrencies in India. However, there are exceptions to this, in order to encourage the use of cryptocurrencies related to technology and its use.

There is no restriction or regulation regarding the use of cryptocurrencies in India at present. It was against this background that Prime Minister Narendra Modi held a meeting with senior officials on cryptocurrencies earlier this month and indicated that strict regulatory measures would be taken to tackle the issue. In recent times, there have been a number of advertisements promising significant returns in investing in cryptocurrencies and also featuring film personalities. In such a situation, concerns were being expressed about the promises misleading the investors.

Last week BJP MP Jayant Sinha, chairman of the Parliamentary Standing Committee on Finance, met representatives of the Crypto Exchanges, Blockchain and Crypto Asset Council (BACC) and others and came to the conclusion that cryptocurrencies should not be banned. Rather it should be regulated. The Reserve Bank of India has repeatedly expressed its strong views against cryptocurrencies. RBI Governor Shaktikanta Das also expressed strong views against allowing cryptocurrencies earlier this month, saying it poses a serious threat to any financial system.

What is cryptocurrency?

To understand what cryptocurrency is, understand what it is not. It is not our traditional, government currency, but there is increasing acceptance about it. Traditional currency works on a centralized distribution system, but cryptocurrency is maintained through decentralized technology, blockchain. Due to this there is a lot of transparency in this system, but due to encryption, there is anonymity i.e. some things remain secret. Supporters of crypto say that this virtual currency gives investors the power to deal among themselves, and not under regulated entities like traditional currency.

Crypto is a virtual medium of exchange. It can be used to purchase a product or service. Which are crypto transactions. They are kept in a public ledger and are cryptographically secured. In which it has been said to ban private cryptocurrencies and create a framework to regulate the digital currency issued by the RBI.

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