Former Central Bank of India Governor Raghuram Rajan said last year’s plunge in cryptocurrency prices suggested the industry was doomed, according to Reuters.
But lower prices will allow investors to focus on the “true value” of digital assets, distributed ledger technology and smart contracts, Rajan said.
Speaking at the World Economic Forum Annual Meeting in Davos, Rajan said:
“The idea that cryptocurrencies are somehow trying to maintain their value while fiat currencies collapse is nonsense.”
Fiat currencies have “won” in terms of credibility, Rajan reportedly told Reuters. The cryptocurrency industry has suffered a series of blows to its credibility over the last year as major players collapsed, misappropriated user funds and experienced fraud.
The most notable impact is the demise of FTX and Alameda Research, with the criminal trial of its founder Sam Bankman-Fried scheduled for October.
RBI crypto blanket ban
What is interesting, however, is that Rajan’s views are at odds with the current Reserve Bank of India (RBI) Governor Shaktikanta Das. Das, who is pushing for a total ban on cryptocurrencies in India, believes cryptocurrencies have no intrinsic value.
Das likens cryptocurrency trading to gambling, but world-renowned economist Rajan believes the technology’s full potential is yet to be seen.