He compared the expansion of the Unified Payments Interface (UPI) with blockchain technology, stating, “One of the reasons it’s so popular is because it’s so straightforward.”
In a debate with the International Monetary Fund (IMF), T Rabi Sankar, the deputy governor of the Reserve Bank of India (RBI), said that he didn’t like crypto when talking about India’s ability to change the crypto and blockchain ecosystem.
Rabi Sankar started the conversation by talking about the success of the Unified Payments Interface (UPI), which is India’s own peer-to-peer payments system based on fiat currency. Over the past five years, the number of users and transactions has grown by an average of 160% per year.
“One of the reasons it’s so successful is because it’s so straightforward, “he added, equating the expansion of UPI to blockchain technology. As said by Rabi Sankar:
Even today, blockchain technology, which was launched six to eight years before UPI was founded, is referred to as potentially revolutionary. “[Blockchain] application cases have not been built nearly as rapidly as had been previously anticipated.”
June 2 at 7:00am ET // At the Frontier: India’s Digital Payment System and Beyond will explore the latest developments in digital payments with a focus on lessons from India as well as future with a significant role for Central Bank Digital Currencies. https://t.co/ZSj7i15fBG pic.twitter.com/X6cVyHewEs
— IMF (@IMFNews) May 31, 2022
However, the RBI official noted that a significant portion of the Indian population still lacks access to UPI-based banking due to the lack of smartphone availability. To stop this, the Indian government is making offline payment systems. Some of these systems are already available to the public.
Rabi Sankar also noted that banks will continue to play a vital role in delivering liquidity services to the Indian population, while cautioning that technology cannot be used to create currency.
“A currency must have an issuer or inherent value.” A significant number of cryptocurrencies that are neither are still accepted at face value. Not only by credulous investors, but also by specialists, policymakers, and academics. “
He added that the RBI does not believe stablecoins such as Tether (USDT) should be blindly regarded as 1:1 pegged fiat currencies. Rabi Sankar, speaking on the benefits of a digital rupee, stated:
We think that central bank digital currencies (CBDCs) could make it hard for private people to use cryptocurrencies.
On May 28, the Reserve Bank of India (RBI) proposed a three-step plan for putting CBDC into place “with little or no disruption” to the traditional financial system.
According to Cointelegraph, finance minister Nirmala Sitharaman first announced the proposal to build a CBDC in 2022–23 with the intention of providing a “massive boost” to the digital economy. According to the RBI’s report, the central bank is now experimenting with the development of a CBDC that addresses a variety of problems inside the old system.