ClearMains
Governor Sanjay Malhotra says India supports innovation in distributed ledger technology and tokenisation, but is wary of cryptocurrencies over concerns about monetary sovereignty and capital flows
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Mains Practice Question
Critically examine the implications of the Reserve Bank of India's cautious stance on cryptocurrencies, balancing the need for innovation in underlying technology with concerns over monetary sovereignty and capital flows.
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The Reserve Bank of India is the central bank of which country?
The Reserve Bank of India is the central bank of India, responsible for monetary policy and regulation of the financial sector.
The Reserve Bank of India backs the underlying technology of which type of assets?
The Reserve Bank of India supports the underlying technology of digital tokens, which are used in tokenisation, a process that converts traditional assets into digital forms.
Sanjay Malhotra is the Governor of which institution?
Sanjay Malhotra is the Governor of the Reserve Bank of India, the central bank of India.
Consider the following statements regarding RBI's Stance on Crypto: 1. The Reserve Bank of India supports the use of cryptocurrencies. 2. The Reserve Bank of India is cautious on crypto due to concerns about monetary sovereignty. 3. The Reserve Bank of India has banned the use of cryptocurrencies in India. How many of the above statements are correct?
Statement 1 is false because RBI Governor Sanjay Malhotra expressed the views on cryptocurrencies, but the RBI is cautious on crypto and backs the underlying technology. Statement 2 is true because RBI is cautious on crypto due to concerns about monetary sovereignty. Statement 3 is false because RBI has not banned the use of cryptocurrencies in India.
Consider the following two statements: Statement-I: The Reserve Bank of India is cautious on crypto due to concerns about monetary sovereignty. Statement-II: The RBI Governor's cautious stance on crypto is due to the potential impact on India's monetary sovereignty. Which one of the following is correct in respect of the above statements?
Statement 1 is true because RBI is cautious on crypto due to concerns about monetary sovereignty. Statement 2 is also true because it explains why the RBI Governor's cautious stance on crypto is taken, which is due to the potential impact on India's monetary sovereignty.