Former governor of the Indian central bank Raghuram Rajan said that the collapse in crypto prices last year suggests that the industry has received its deserved fate, according to Reuters.
However, the fall in price will enable investors to focus on the “true value” of digital assets, distributed ledger technology and smart contracts, Rajan said.
At the World Economic Forum’s annual meeting in Davos, Rajan said:
“The idea that somehow cryptos are going to maintain value, while the fiat currencies collapse, that’s nonsense.”
Fiat currencies have “won out” in terms of credibility, Rajan reportedly told Reuters. The crypto industry received back-to-back blows on its credibility last year as big players collapsed and stories of misappropriating user funds and fraud emerged.
The most notable impact came with the fall of FTX and Alameda Research, whose founder Sam Bankman-Fried’s criminal trial is set for October.
RBI crypto blanket ban
What is interesting, however, is that Rajan’s views stand at odds with the current Reserve Bank of India (RBI) governor Shaktikanta Das. Pushing for a blanket ban on cryptocurrencies in India, Das believes cryptocurrencies have no value, intrinsic or otherwise.
While Das compares trading cryptocurrencies to gambling, Rajan — a world-renowned economist — believes we are yet to see the full potential of the technology.