The former governor of the Reserve Bank of India and former chief economist of the International Monetary Fund, Raghuram Rajan, believes bitcoin can work alongside CBDCs.
August 20, 2020 | AtoZ Markets – In a recent interview with the CNBC, the former governor of the Reserve Bank of India and former chief economist of the International Monetary Fund, Raghuram Rajan, said that he sees Bitcoin and central bank digital currencies (CBDCs) working alongside each other.
He also opined that Facebook-backed stablecoin Libra, which is currently under development and is backed by different fiat currencies, will serve as a medium of the transaction instead of volatile assets like Bitcoin.
The former RBI governor has a positive outlook for bitcoin
Raghuram Rajan is currently a finance professor at the University of Chicago. He is known for predicting the 2008 recession in 2007 and spearheading India’s economic recovery in the past decade as governor of India’s central bank. He thinks bitcoin is a little bit like Gold.
“Gold has some value because we value it for jewelry, but [with] Bitcoin you can’t even do that. Nevertheless, it has value because others think it has value,” he said.
He also noted that different digital currencies do different things, and it may be Bitcoin has value going forward just as a store of value, or as a speculative asset.
The ex-banker expressed concerns over central governments tracking user data
The former RBI governor expressed concerns over central governments tracking user data if state-issued digital currencies are eventually launched. He said:
“The beauty of the cash in our hands is that it’s anonymous. Even if you’re not doing something illegal, you don’t want the government seeing everything you do.”
He also questioned how digital currencies would operate once rolled out, considering the current benefits of using cash. China is set to become the first major nation in the world to issue a central bank-backed digital currency dubbed DCEP. Several have questioned the privacy concerns and the centralization nature of the digital currency.
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