PIC had the honour of hosting Dr. Prakash Hebalkar, Corporate Strategy and Public Policy Consultant and Dr. Shubhashis Gangopadhyay, Research Director, India Development Foundation and Dean, Indian School of Public Policy for a discussion on the topic “The Role of Digital Currency,” on 17th July. This session was chaired by Dr. Ajay Shah, Research Professor of Business, Jindal Global University. The event was moderated by Dr. Shilpa Phadke, Member, PIC, who introduced the speakers and chair.
Dr. Shah provided a brief background of the concept of digital currency – beginning from the origins of Bitcoin to the academic and technical debates over the viability and development of ‘stateless’ currency (that would not be regulated by institutions such as central banks), which could be used to transact digitally across the globe. Dr. Hebalkar elaborated on how the trend in use and availability of cryptocurrencies grew as they remained computationally complex commodities and thus available only to a technological, privileged few. He also explained other pseudo-currencies such as Ethereum and stable ‘coins’ while noting that their ‘trustworthiness’ was untested, especially given the anonymity they afforded everyone. He explained their growing popularity as investment instruments and the difficulties of regulating pseudo-currencies for government and market institutions. He concluded with a mention of the effect of digital currency on trade, monetary and economic power, which could tip the balance of power either way in the foreseeable future.
Dr. Gangopadhyay discussed the trustworthiness of digital currency. He explained that the reason central banks were now exploring digital currency technology was in order to reduce the cost of transactions, which were currently very high for most non-cash transactions conducted across the world today. He highlighted some issues that could be faced, including what would determine the value of digital currency, the role of central banks in this, as well as the split in the use of digital currency between the wholesale and retail ends.
The discussion was followed by a round of questions and answers.