The demand for cryptocurrencies is increasing all over the world. On this, former RBI governor Raghuram Rajan says that if cryptocurrencies are properly regulated, then it has a lot of potential in the future.
Raghuram Rajan also said that it is not yet clear which fundamentals are supporting its valuation, despite the hope for a better future for the regulated cryptocurrency.
Raghuram Rajan from Reuters said, “Cryptocurrencies will not be your last resort in difficult times. Once they are used properly, then I will have confidence in their valuation. How will the payment method, especially cross border transactions, be done.”
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Apart from giving his opinion on cryptocurrencies, Rajan also said that central banks should not include investment in new companies as part of their responsibilities. He said that it should be the responsibility of the government to promote investment continuously and not the central banks as they already have many policy related responsibilities.
Raghuram Rajan was speaking at the Reuters Global Markets Forum on August 25. “Central banks should stay away from politically motivated fresh investments as the scope of functioning of central banks is already very large,” he said.
Raghuram Rajan said, “Telling the central banks that they can only buy green bonds and not brown bonds. It’s like imposing an opinion on a fiscal issue.”
Raghuram Rajan was the Chief Economist of the International Monetary Fund before taking over as the Governor of RBI. He said that instead of focusing on green investments, central banks should focus on crypto currency and cyber security.
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