RBI Cautious on Crypto, Focuses on Underlying Technologies

RBI Governor Sanjay Malhotra emphasized that India has maintained a cautious approach towards cryptocurrencies while promoting underlying technologies. He stated that the country supports innovation in distributed ledger technology and tokenization but remains wary of cryptocurrencies due to concerns over monetary sovereignty, policy, and capital flows.

Malhotra highlighted that cross-border payments are a significant challenge, for which other solutions, including central bank digital currencies (CBDCs), can be explored. He noted that the primary issue is not domestic payments, as these have become fast, cheap, and convenient in many countries.

The RBI Governor also discussed the impact of rising public debt and hardening bond yields globally. He attributed this trend to increased government and private-sector spending, particularly on account of artificial intelligence (AI). Malhotra stated that money is scarce, leading to higher demand for bonds and subsequently harder yields and debts.