Uday Kotak, Vice Chairman and Managing Director of Kotak Mahindra Bank, one of the largest financial organizations in India, says that in his view Bitcoin is in its very early days and is an artificial currency. However, whether it is creating new money, being sustainable, or whether Bitcoin would survive, he has many questions about the virtual currency.
Participating in the World Economic Forum Annual Meeting, Uday Kotak said that Bitcoin and other virtual currencies are becoming popular and in such a situation it is important for central banks to take a hard look at this phenomenon, and take a decision on the future of such currencies.
It has to be noted that India’s central bank earlier issued guidelines for Bitcoin users and warned them about it. A couple of Bitcoin companies were raided by the Enforcement Directorate then.
Bitcoin Will Always be Country Specific
Kotak Mahindra Bank which has huge stakes in financial and banking services can play a vital role in the Bitcoin economy; however, the kind of understanding that the Indian government has about the digital currency is a major hurdle. According to Uday Kotak, people do not understand it well enough and he believes that for it to be a really widely used currency, it has to be simple.
Talking about Bitcoin Uday Kotak said that on talks about the need for a global financial regulator; however, it would be very difficult to have a one-size-fits-all system. In his opinion, a lot of things depend on the host country, as according to him it is very clear that regulations of each country are also determined by the politics of that particular country.
Therefore, according to Kotak, he will be very surprised if something like a single global regulator is made. Nonetheless, Uday Kotak thinks that there may be some standard rules for all countries, but (having) a single regulator will be very challenging. He also feels skeptical about the grant of new banking licenses by the RBI that may shake-up the system.
Bitcoin has been part of great debate in Davos, Switzerland this season. Earlier ForexMinute reported that Nobel Laureate Economist Robert Shiller came downheavily on Bitcoin when he said that it is a bubble. The 2013 Nobel Prize in Economics said that Bitcoin is a bubble; there is no question about it. He had then concluded that Bitcoin is just an amazing example of a bubble.
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