Raghuram Rajan, former Governor of the Reserve Bank of India (RBI), stated that cryptocurrencies will not be the final choice in a doomsday scenario when discussing the financial stability of green investments and cyber security concerns. IN an interview, Mr. Rajan stated, ”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,”
The statements from the top economist come at a time when prominent cryptocurrencies like bitcoin and ethereum have lately seen a price recovery versus the US dollar, following months of continuous price declines.
The current rise in crypto prices has boosted investor confidence, as many have recouped their losses in virtual currencies after many months of deficits.
Mr. Rajan, who formerly worked at the International Monetary Fund (IMF) as Chief Economist and Director of Research, claimed that central banks should now focus on the financial stability of green investments, as well as other “threats,” such as digital currencies and information assurance.
However, the former RBI Governor remained upbeat about the future of digital currency, stating that cryptocurrencies, particularly well-regulated stablecoins, had a “potential future.” ”But it wasn’t clear what fundamentals were backing their valuations other than a “heady environment,” with easy monetary policy fuelling all asset prices,’ Mr. Rajan wrote.
Mr. Rajan, a finance professor at the University of Chicago Booth School of Business, believes that central banks should refrain from mandating green investments and should avoid politically motivated unregulated sectors.