Former Reserve Bank of India governor Raghuram Rajan told Reuters in a Global Markets Forum that Cryptocurrencies can become an effective way of payment in the future. He mentioned that these digital assets might become an effective payment method, even though their fluctuating values.
The former chief economist for the IMF seemed more positive on more stable and regulated coins such as Stablecoin.
A stablecoin is a digital currency connected to an asset, such as the US dollar, or a valuable metal like gold.
Financial Risks Connected to Crypto
According to the Reuters report, Raghuram Rajan did not seem clear on the fundamentals pushing the valuations of crypto.
Currently, in this atmosphere, with asset prices increasing fast, many cryptocurrencies get more value.
Also, in India, cryptocurrency exchanges force the government to establish crypto as digital assets instead of currency. According to industry experts, this might help the government approach all its legal concerns regarding financial risks connected to crypto.
In the meantime, Nirmala Sitharaman, finance minister, stated that the law on crypto is expecting Cabinet approval.
Rajan said that some crypto might become an efficient payment method despite their fluctuating rates in his interaction with Reuters.
He said that Cross border payments are one wide-open area because of the immense transaction costs of making cross-border payments.
In India, the crypto industry started to grow in 2018 to around 15-20 million investors, with more than $1.6 billion invested.
Rajan said that, in his opinion, the current value of crypto seems to be very useful be helpful in the system.
Later he explained his words regarding crypto and its further development. He said that he did not mean that the bitcoin will implode tomorrow. However, the value of the crypto will soon find its better use with the evolving technology.