President of the Center for Digital Economy Policy Research in India Jaijit Bhattacharya has argued that cryptocurrencies are not a good investment as they attract new consumers based on a promise of “incredible returns”.
Speaking to the Economic Times of India, Bhattacharya said there are some technical benefits to cryptocurrencies. He acknowledged that the ease of transaction is a major plus of cryptocurrencies but cautioned that anonymity could be a problem.
Bhattacharya explained crypto anonymity in the context of finding the real person behind a crypto address could be difficult.
Even though all transactions are traceable, there is no guarantee that you can ever find out who sits behind the actual cryptocurrency wallet. Bhattacharya argued that because of this “anonymity”, people who transact money through crypto very often want to make sure that those transactions and their associations with those holdings remain under the radar for traditional banking.
The expert also said their lack of real-world, measurable value was a problem. He argued that cryptocurrencies are ultimately “extremely destabilizing” for governments.
Places such as the European Union and the US have issued warnings of stablecoins leading to market crashes and becoming interconnected with mainstream finances.
Bhattacharya is aware that cryptocurrencies are here to stay and he acknowledged their utility in the interview, but he also added that for cryptocurrencies to be done well, they would have to probably fall in the remit of a central banking authority, such as the Reserve Bank of India.