Business
Most people holding cryptos will be aggrieved; only a handful currencies may survive: Raghuram Rajan
NEW DELHI: Former Reserve Bank of India (RBI) governor Raghuram Rajan on Wednesday said that most of the existing cryptocurrencies will perish and only a handful of them may survive.
In an interaction with CNBC, Rajan said that most cryptos have no permanent value, and only some with exist to provide payments, especially cross border payments.
“Of the 6,000 #cryptocurrencies, only 1 or 2 or a handful may survive,” he said.
Rajan further stated that a lot of people holding crypto assets are going to be aggrieved with the Centre’s regulation bill, adding that most cryptos have value only because there is a greater fool out there willing to buy.
Citing the example of crypto markets in the US, the former RBI governor said: “In the US, crypto is a $2.5 trillion problem that nobody really wants to regulate. In part, regulators don’t fully understand this industry and how to regulate it.”
Rajan’s comments come a day after the government said that it will introduce the much-talked-about bill to regulate and restrict cryptocurrency in the country.
The Cryptocurrency and Regulation of Official Digital Currency Bill seeks to ban all but a few private cryptocurrencies to promote underlying technologies while allowing an official digital currency by RBI.
The bill, if passed, would effectively ban people from transacting in most cryptocurrencies.
The announcement triggered heavy selling in the country’s digital currency markets, as investors look to exit positions despite the losses, said traders and investors.
Several exchanges were facing deposit and withdrawal challenges due to the high volume of selling, said cryptocurrency traders.
WazirX, one of India’s largest cryptocurrency exchanges, said earlier on its official Twitter account that it was investigating reports that users were facing delays on its app and website. It later said the issue had been resolved.
There are an estimated 15 million to 20 million cryptocurrency investors in India, with total crypto holdings of around 400 billion rupees, according to industry estimates. There is no official data available on cyrptocurrency holdings and the user base.
(With inputs from agencies)
In an interaction with CNBC, Rajan said that most cryptos have no permanent value, and only some with exist to provide payments, especially cross border payments.
“Of the 6,000 #cryptocurrencies, only 1 or 2 or a handful may survive,” he said.
Rajan further stated that a lot of people holding crypto assets are going to be aggrieved with the Centre’s regulation bill, adding that most cryptos have value only because there is a greater fool out there willing to buy.
Citing the example of crypto markets in the US, the former RBI governor said: “In the US, crypto is a $2.5 trillion problem that nobody really wants to regulate. In part, regulators don’t fully understand this industry and how to regulate it.”
Rajan’s comments come a day after the government said that it will introduce the much-talked-about bill to regulate and restrict cryptocurrency in the country.
The Cryptocurrency and Regulation of Official Digital Currency Bill seeks to ban all but a few private cryptocurrencies to promote underlying technologies while allowing an official digital currency by RBI.
The bill, if passed, would effectively ban people from transacting in most cryptocurrencies.
The announcement triggered heavy selling in the country’s digital currency markets, as investors look to exit positions despite the losses, said traders and investors.
Several exchanges were facing deposit and withdrawal challenges due to the high volume of selling, said cryptocurrency traders.
WazirX, one of India’s largest cryptocurrency exchanges, said earlier on its official Twitter account that it was investigating reports that users were facing delays on its app and website. It later said the issue had been resolved.
There are an estimated 15 million to 20 million cryptocurrency investors in India, with total crypto holdings of around 400 billion rupees, according to industry estimates. There is no official data available on cyrptocurrency holdings and the user base.
(With inputs from agencies)
