“All these cryptocurrencies have been created by non-sovereigns.” The report went on to highlight the fact that crypto-currencies do not have any intrinsic value of their own and lack any of the attributes of a currency.
“Therefore, the Committee is of clear view that the private crytocurrencies should not be allowed,” the report said. “These cryptocurrencies cannot serve the purpose of a currency. The private cryptocurrencies are inconsistent with the essential functions of money/currency, hence private cryptocurrencies cannot replace fiat currencies.”
The Committee, however, leaves the door open for the central bank issued cryptocurrencies, adding that it endorsed the RBI’s stance of banning any sort of interface of cryptocurrencies with the banking system in India.
While the committee has taken a strong stance against cryptocurrencies, it has highlighted the benefits of the underlying technology— the distributed ledger technology (DLT) and blockchain. “The Committee recommends that the RBI examine the utility of using DLT based systems for enabling faster and more secure payment infrastructure,” the report said.
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