If the Budget’s move to tax 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 is worth noting. Urging investors to recognize the risks of investing money in them, he said “these cryptocurrencies have no basis”. [asset], Not even a tulip!” This was a possible reference to the 17th-century bubble of tulip prices fueled by the buying frenzy in Europe, which inevitably burst, leaving many speculators with great losses.
The only digital currency that our central bank would have us adopt is the digital rupee which it plans to unveil sometime in 2022-23. Deputy Governor T. Rabi Shankar said this would be the electronic version of our regular rupee, which would be convertible on a one-to-one basis. This statement was probably intended to differentiate it from speculative digital tokens. An e-rupee would clearly not be one of them. Instead, it is meant to serve as a means of exchange like paper cash. What has not been disclosed is whether it will offer similar anonymity of use, a feature that could allow us to envision a truly cashless future, or whether the use of the digital rupee will leave a digital mark.
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