While discussing the financial stability of green investments and cyber security threats, Raghuram Rajan, Former Governor, Reserve Bank of India (RBI) said that cryptocurrency will not be the last resort in a doomsday scenario. ''I would be much more confident about the value of these cryptos once they find proper use cases, such as an effective means of payment, especially in cross-border transactions,'' said Mr Rajan in an interview with news agency Reuters.
The comments from the top economist come at a time when leading cryptocurrencies such as bitcoin and ethereum have recently witnessed a rebound against the US dollar, after months of registering an incessant decline in prices. The recent surge in crypto prices has strengthened investor sentiment as people have recovered losses in digital currencies after several months.
Mr Rajan, who earlier served as the Chief Economist and Director of Research at the International Monetary Fund (IMF) stated that central banks should now focus on the financial stability of green investments, and other ''threats'' such as crypto currencies and cyber security. (Also Read: Central Banks Should Not Mandate 'Green' Investments: Raghuram Rajan )
However, the former RBI Governor remained optimistic on the prospects of digital currency, claiming that crypto currencies have a "potential future," particularly well-regulated stablecoins. ''But it wasn't clear what fundamentals were backing their valuations other than a "heady environment," with easy monetary policy fuelling all asset prices,'' added Mr Rajan.
Mr Rajan, who is a professor of finance at the University of Chicago Booth School of Business, said that central banks should not mandate green investments and should steer clear of politically driven unlegislated areas.
On Thursday, August 26, the world's most popular and largest cryptocurrency by market cap - bitcoin was last trading 2.59 per cent lower at $47,187.4 against the US dollar.