India, despite its reluctance to make crypto a part of its financial systems, has shown growth in putting it the country’s fiat currency on the blockchain. The pilot project for India’s digital rupee CBDC went live earlier this month, and around the same time the FTX crypto exchange collapsed, wiping off over $200 billion (roughly Rs. 16,32,940 crore) from the global crypto market. Industry insiders have now weighed in on whether Indians need to link CBDCs to the crypto sector and worry over financial risks amid the ongoing crypto industry meltdown.
CBDCs and cryptocurrencies, are both built on blockchain, which is a type of a distributed ledger technology. The main difference between them is that CBDCs are issued by central banks and are regulated, but cryptocurrencies are not controlled by central banks and are largely unregulated.
In conversation with Gadgets 360, Alankar Saxena, the Chief Technical Officer and Co-Founder of Mudrex has reminded Indians that our CBDC is just the regular rupee on blockchain and is not affected by the crypto market volatility.
“The digital rupee CBDC would gain prominence irrespective of the crypto market’s downturns. There will not have any significant impact on the digital rupee. Instead, it can help people move into a cashless system, improving transparency,” Saxena said.
Earlier this month, RBI governor Shaktikanta Das called the launch of India’s CBDC pilot a landmark moment in the history of currency in the country.
“This is something where we have to proceed with very carefully. Will to try and launch the CBDC in a full-fledged manner in the near future. This is the first time the world is doing it. We don’t want to be in a great hurry, we want to learn from the experience,” Das had said at the time.
With CBDC trials, India is making clear progress in further digitising its economy and the country should not delay the process any further, industry insiders say. The pilot launch is said to have generated considerable interest in India.
Reserve Bank of India takes the first step to implementing crypto in India with the launch of the Digital Rupee Pilot Project.
The payment system is expected to be affordable, accessible, convenient, efficient, safe, and secure.#crypto #cryptonews #cryptoforce #cryptoindia— Akshit Khanna (@khannaakshit29) November 4, 2022
3. How do you use e-rupee?
The retail version is token based. Broadly, you find out the recipient’s public key & transfer money to them using your private key. In simpler terms, transferring money through UPI, same process or like Paytm wallet money of yesterday years.4/n pic.twitter.com/aRTwOIpX5K
— Siddharth Alok (@sidalok7) November 6, 2022
Talking to Gadgets 360, Mohammed Roshan, the Co-Founder and CEO of crypto-focussed fintech firm GoStats said that anybody worried about financial risks around CBDCs can relax. He highlighted that the RBI has repeatedly clarified that the CBDCs are totally different from cryptocurrencies and are aimed at advancing the existing financial systems.
“From the way RBI has positioned the CBDC, it seems to be quite different from crypto. I don’t think the RBI would see a connection between CBDC and the crypto market slowdown and would continue to execute its plans,” Roshan noted.
In a recent report, KuCoin crypto exchange claimed that India currently has over 115 million crypto investors, making for 15 percent of its massive population.
The stress over investing in the crypto market has, however been peaking in Indian cities. CoinKickoff recently listed Bengaluru, Chennai, and Ahmedabad among the twenty most ‘crypto-stressed’ cities in the world.
The market downturn has stirred major concerns about participation in the crypto sector, or related projects. Layoffs plaguing the sector in the aftermath of the crypto crash have also triggered tensions amid people working in the industry.
The ongoing regulatory draft works on crypto laws around the world also emerged as the main reason why investing in these digital assets is being seen as stressful in several parts of the world, including India.
Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.