RBI Maintains Caution on Cryptocurrencies, Sees Promise in Blockchain Technology

India's central bank, the Reserve Bank of India (RBI), continues to approach cryptocurrencies with caution, but is supportive of blockchain technology, according to RBI Governor Sanjay Malhotra. Speaking at the Kautilya Economic Conclave, Malhotra emphasized that the country is concerned about the impact of cryptocurrencies on monetary sovereignty, monetary policy, and capital flows, particularly for emerging economies.

The RBI governor pointed out that the primary challenge with cryptocurrencies lies in cross-border payments, rather than domestic transactions, which have become relatively fast, inexpensive, and convenient in countries like India. He suggested that alternative solutions, such as central bank digital currencies (CBDCs), could be explored to address this issue.

Malhotra also touched on the increasing global public debt and rising bond yields, attributing the trend to demand and supply conditions, as well as increased spending on artificial intelligence (AI). He noted that the RBI's monetary policy is focused on India's domestic growth and inflation conditions, but is also attentive to international interest-rate movements.