Rohit Akundi
Few things are as volatile and unpredictable as cryptocurrencies. At its peak in April 2021, crypto truly looked unstoppable. In less than a year, however, it came crashing down. The term used to describe this phenomenon, Crypto Winter, is the Bear Market equivalent of the crypto space. Crypto enthusiasts today operate using an arsenal of crypto slang. It is common to hear enthusiasts dismiss any opinion, citing Fear, Uncertainty, and Doubt (“FUD”). They instead advocate Holding Onto Crypto for Dear Life (“HODL”). Governments worldwide have actively tried to regulate crypto (with few exceptions). In their opinion regulation alone can ensure investor safety. Staunch crypto activists dismiss this theory. In their opinion, regulation is an attempt to destroy the very fabric of crypto, that is decentralisation. While cryptocurrencies remain legal to trade in several countries, a new alternative in the form of Central Bank Digital Currencies (“CBDC”) has come about. The legal implications, usefulness, and potential of CBDCs continue to be in the air. This paper will discuss the elements of a CBDC with reference to India. An attempt will also be made to discuss the key legal barriers to CBDCs. The question of whether CBDCs can co-exist with other cryptocurrencies will be posed and the prospect of interoperability will be discussed.
