Raghuram Rajan, governor of the Reserve Bank of India (RBI), the central bank of India, recently said in an interview with CNBC that in the future, central banks around the world will begin to issue their own digital currencies. A world in which Bitcoin and Facebook-backed Libra may play a role. Raghuram Rajan believes that Bitcoin is a "speculative asset", while Libra is specifically designed for transactions, so when central banks begin to issue digital currencies, Bitcoin and Libra may be able to play different roles.

In a recent interview with CNBC’s podcast “Beyond the Valley,” former Indian central bank governor Raghuram Rajan believed that in a world where central banks around the world are beginning to issue their own digital currencies, Bitcoin and Facebook-backed Libra may come into play. Although both Bitcoin and Libra have currently received a lot of criticism, Raghuram Rajan believes that as central banks intervene in the digital currency market competition, both digital currencies will definitely have a place. He explained:

In Raghuram Rajan’s view, digital currencies may have an impact on central banks and retail lending globally. The role played by service providers has a significant impact and may change the entire financial system. Of course, whether this idea can actually become a reality is still under discussion, but central banks may issue digital versions of fiat currencies, such as the People's Bank of China is already conducting pilots, and other central banks are also considering whether to issue their own digital currency.

Bitcoin is a "decentralized" cryptocurrency, which means that it is inherently different from fiat currency. Bitcoin does not have a central authority to manage its issuance, but is built on what is called Based on blockchain technology, the basis for supporting Bitcoin transactions is the immutable public ledger. However, Bitcoin has often been criticized as a speculative asset, with legendary investor billionaire Warren Buffett saying earlier this year that Bitcoin was “worthless.”

In contrast, Libra takes a more centralized approach. This project is led by Facebook and proposed in 2019. But Libra soon attracted severe criticism from regulators, especially because of Facebook’s “record” issues with data privacy.

The original idea for Libra was to become a so-called "stablecoin" that would be backed by a basket of global currencies. Compared with the volatility of Bitcoin, this currency issuance model will keep the value of Libra stable. However, the idea was opposed by regulators, and Facebook had to "narrow down" Libra's ambitions. However, in April this year, David Marcus, director of the Libra Association’s board of directors, stated that Libra does not have to be pegged to a basket of currencies as originally set, but can also be pegged to a single country’s legal currency such as the U.S. dollar.

But now, Facebook’s digital currency Libra has made many changes worthy of attention. In addition to enhancing compliance procedures and addressing concerns that the network could be used to launder money or raise funds for illegal activities, Libra has also transformed from its original planned "global currency" to one that is 1:1 with a single sovereign currency. Libra will provide sufficient reserves for anchored stablecoins and for different sovereign currencies. Finally, it is worth mentioning that Libra has given up on the idea of ??building a permissionless blockchain environment like Bitcoin or Ethereum, and has now turned to building a permissioned blockchain.

Raghuram Rajan believes that Bitcoin is a "speculative asset" and not one that can be used for large-scale transactions, which makes people feel that when traditional assets such as bonds are less attractive , investors tend to rush into assets like Bitcoin. He explained:

“Bitcoin is indeed a bit like gold in the sense that gold actually has a certain value because we use it in jewelry, but Bitcoin can’t even do that That. However, Libra has value as long as someone thinks it has value. And the whole idea is not to think of it as a speculative asset with appreciation in value. It is to use it for transactions. Therefore, the final underlying value will come from the central bank, and the central bank will retain the value, rather than Libra retaining the value, the value of Libra is reflected in the value it can be exchanged for.

”

The former Indian central bank governor said that having a “monopoly” private digital currency would be problematic, so the market may end up with competing private digital currencies with different roles, La. Ghulam Rajan added:

“So I think the bottom line is that different private currencies will serve different roles and the value that Bitcoin has may be just a store of value or a speculative asset. , and Libra may become a currency more used for transactions,”

Data Focus

One of the biggest challenges facing digital currencies is how to deal with the accompanying

In this regard, Raghuram Rajan put forward the idea that cash may be the real anonymous currency, explaining:

“What you think about the central bank Are banks trusted with every detail in every transaction? Should the government know every transaction you make? The reason cash in our hands looks good is because cash is essentially anonymous. Even if you're not doing anything illegal, you probably don't want the government to see everything you do. ”

In fact, the same anonymity and privacy issues exist with private digital currencies, but Raghuram Rajan said it may be necessary to “consolidate data” between these competing digital currencies because No one wants the whole thing to be Balkanized

But there are still several questions that need to be answered about how to protect that data, Raghuram Rajan concluded, including:

1. We need some broader global rules of the game. How should a country handle data collected from abroad about who uses its currency?

2. Where are the conventional protections when using digital currencies?

3. If someone uses foreign digital currencies to purchase certain services that may harm their own country, are they potentially subject to espionage surveillance?

4. Will the use of digital currency be affected by illegal activities such as extortion and cause losses to digital currency holders?

Don’t care about these issues. Today, These problems are actually very close to us.

#BTC[超话]#