‘Not even a tulip!’
PremiumWhat hasn’t been disclosed is whether the digital rupee will offer the same anonymity of use, a feature that could allow us to envision a truly cashless future, or whether using it will leave a digital trail
If the budget’s move to impose a tax on digital assets was taken as an implicit admission of the legitimacy of crypto tokens as an asset class, Reserve Bank of India governor Shaktikanta Das’s flag of caution on Thursday deserves attention. Urging investors to recognize the risk of putting money in them, he said, “These cryptocurrencies have no underlying [asset]. Not even a tulip!" This was a likely reference to a 17th-century bubble of tulip prices inflated by a frenzy of buying in Europe that left many speculators with large losses after it inevitably burst.
The only digital currency our central bank would have us adopt is the digital rupee that it plans to unveil sometime in 2022-23. Deputy governor T. Rabi Sankar said it would be an electronic version of our regular rupee, convertible on a one-to-one basis. This statement was presumably aimed at setting it apart from speculative digital tokens. An e-rupee will clearly not be one of those. Instead, it’s meant to serve as a means of exchange, like paper cash. What hasn’t been disclosed is whether it will offer the same anonymity of use, a feature that could allow us to envision a truly cashless future, or whether using digital rupees will leave a digital trail.
Never miss a story! Stay connected and informed with Mint. Download our App Now!!