In a publish on LinkedIn, the investor & entrepreneur co-founder praised India’s digital funds infrastructure, calling UPI a transformational success story, whereas additionally backing the Indian authorities and regulators for resisting stress to aggressively embrace dollar-backed stablecoins.
Kamath argued that stablecoins pegged to the US greenback might not essentially align with India’s long-term strategic and financial pursuits. Whereas a number of nations and fintech companies globally are exploring dollar-linked stablecoins for cross-border funds and digital finance purposes, he prompt that extreme dependence on such devices might finally strengthen greenback dominance inside rising economies.
“UPI has been unimaginable for India to say the least. Additionally to all of the good folks, some pals of mine who champion the necessity for a greenback backed secure cash(I am talking for greenback backed stablecoin particularly), this looks like a foul thought, long run, for India. Credit score the place it is due, to Modi govt and Indian regulators, you in all probability received this one proper within the face of a number of stress. However if there have been a gold based mostly stablecoin, and one might monetize the unutilised gold in Indian households to return a yield, do not know sufficient to speak about this, however ideas?” Kamath stated.
As a substitute, Kamath floated the opportunity of a gold-based stablecoin tailor-made for India, given the nation’s deep cultural affinity for gold and large family holdings of the valuable metallic. India is estimated to carry one of many world’s largest non-public gold reserves, a lot of which stays locked in houses and generates no monetary return.
In keeping with Kamath, a gold-backed digital token might doubtlessly assist monetise these idle property whereas additionally providing traders a yield-generating avenue. Although he clarified that he doesn’t know sufficient concerning the topic to make definitive claims, the concept raises broader questions round whether or not blockchain-based monetary merchandise might finally be linked to real-world property akin to gold as a substitute of fiat currencies.
India has to date adopted a cautious regulatory stance towards non-public cryptocurrencies whereas concurrently selling digital public infrastructure akin to UPI and the digital rupee initiative led by the Reserve Financial institution of India.
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