CBDCs and Cryptocurrencies: The Way Forward for a Balanced Approach in India
While CBDC and private cryptocurrencies are gaining pace across the globe, India has reached a vital juncture. According to Sumit Gupta, the co-founder and chief executive of CoinDCX, CBDCs and cryptocurrencies should not be rivals but complement each other; they would serve different purposes in the digital economy.
Purpose Over Competition
In a post on social media dated October 23, Gupta explained that while CBDCs are issued by central banks and therefore create total control for governments in terms of their use, cryptocurrencies like Bitcoin are decentralized assets. He stressed that they do not have to be pitted against each other because each of them plays a different role in the financial space.
Balancing Innovation and Security
There is reason in Gupta’s call for coexistence. The Indian regulatory landscape is being built piece by piece, and he asks for a strategic balance between innovation and security, pushing policies that will go easy on the country’s fintech sector without really cramping growth. With more than 75,000 Web3 professionals and sodelin blockchain startups, going the restrictive way could indeed hurt India’s chances of leading in digital finance.
Managing Risks and Public Trust
The advent of CBDCs has raised a number of red flags in terms of privacy and control. In the words of Jack Booth from TON Society, “public trust in centralized authorities is at an all-time low,” which in the West translates into significant unease concerning financial self-determination and personal data. This has been one of the reasons many people have gravitated toward decentralized options such as Bitcoin, promising users greater control.
Regulatory Challenges
According to Gupta, the regulatory environment in India is inimical. He refers to the heavy tax rates levied on crypto-related transactions. He hopes that some kind of tax exemption will be given, through which the users would not shift to overseas-based platforms-a development that would benefit the local economy, with due respect for national guidelines.
Outlook ahead
The fact that both CBDC and cryptocurrencies coexist in harmony would be an example to many other countries if it happened in the case of India. As Gupta underlined, both forms are relevant, and with sensitive regulation, India is able to create conditions for a strong digital economy-one that encourages innovation and protects financial stability.
