Unbacked cryptos have no value, stablecoins risk policy sovereignty: RBI DG

The RBI Deputy Governor said stablecoins could pose a risk to emerging economies like India and do not serve a purpose that cannot be better fulfilled by a Central Bank Digital Currency (CBDC). He also added that cryptocurrencies do not serve any purpose that existing forms of money cannot do better.

Speaking at an event in Mumbai T. Rabi Sankar stated that even though stablecoins are backed and have value, they carry a significant risk of replacing local currency and affecting “policy sovereignty.”

“Stablecoins do not serve a purpose that cannot be done better with CBDC, and introducing stablecoins, not even on balance, would pretty much create a lot of policy concerns and issues that are best avoided,” he stated.


On cryptocurrencies, he said, “I am not using these words loosely… unbacked cryptos have no underlying cash flows, have no issuer, and therefore they are no one's liability, and therefore they have no value.”

He said, “It's a different matter that people are willing to buy things for large amounts, that's their choice, but our assessment is that unbacked cryptos have no value, they are not financial assets.”