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Top Indian Central Banker Says Cryptos Have a Future But Fears Monopoly



The former governor of Reserve Bank of India, Raghuram Rajan, said that private cryptocurrencies like Bitcoin (BTC) and Facebook’s Libra may have a future even when central banks roll out their own digital currencies.

Rajan, who was also the Chief Economist and Research Director at the International Monetary Fund from 2003–2006, said during a CNBC podcast that one of these digital currencies might only become problematic if it were to hold a monopoly.

However, he believes that there will be other private digital currencies that will play different roles and provide strong competition to existing ones.

The former central banker said that in the future, Bitcoin will mainly act as a store of value or a speculative asset rather than a medium of exchange. “Bitcoin is a bit like gold,” he added.

Conversely, Libra will be used for day-to-day transactions, Rajan said.

Rajan also expressed his concerns about banks issuing central bank digital currencies. He said that banks will be able to obtain a huge amount of information through the use of CBDCs, but people may not be comfortable sharing all their personal payment information. Banks would need to decide what data they want to collect and how they would want to use it, he added.

Similar to private digital currencies, it will also be a problem if there is a “monopoly central bank digital currency without safeguards on the central banks use and management of the currency and the data that accompanies it.”

It will be beneficial to have competition for both private as well as central bank digital currencies, Rajan said.

Rajan concluded that, while there are challenges to be solved in the digital currency space, he would like to see private digital currencies co-exist with central bank digital currencies and see what works out best.

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3 reasons why Bitcoin price has not been able to rally back above $40K




The ongoing story for the past couple of months in the cryptocurrency market has been confusion on whether Bitcoin (BTC) is destined for another leg down or is finally ready to break out toward new highs.

Bitcoin’s price history and data from previous corrections suggest that the current struggles for the top cryptocurrency could persist for a little bit longer due to the strengthening dollar, the possibility of decreasing economic stimulus and a slew of technical factors connected to Bitcoin’s price action.

A strong dollar threatens Bitcoin’s recovery

According to data from Delphi Digital, one of the biggest factors placing strain on risk assets around the globe is the strengthening U.S. dollar which appears to be attempting a trend reversal after falling below 90 in late May.

DXY 1-day chart. Source: TradingView

Rising dollar strength put a halt to the year-long uptrend in the 10-year US Treasury yield which is also a reflection that the economic expansions seen in the first half of 2021 are beginning to lose steam and there is a threat that a new wave of Covid-19 infections threatening the global economic recovery.

Fractals and the Death Cross suggest the correction is not over yet

The short-term outlook for Bitcoin remains bearish as previous instances of the “Death Cross,” which appeared on BTC’s chart in late June, have been followed by a corrective period that can last for nearly a year.

Bearish crossover of the 50 day and 200-day MA. Source: Delphi Digital

According to the analysts at Delphi Digital, the 12-month moving average is being tested as support, and a dip below this level would signal further downside for BTC price.

Bitcoin price testing the12-month moving average. Source: Delphi Digital

The 12-month moving average has been a key support level for Bitcoin historically, so how the price performs near this level could dictate whether the current uptrend remains intact.

Related: El Salvadorians take to the streets to protest Bitcoin law

Overall, caution is warranted for traders because low volumes have historically led to higher volatility when fewer open bids can lead to rapid price fluctuations.

As explained by Kevin Kelly, a certified financial analyst at Delphi Digital, “the short-term outlook turns quite a bit more bearish if and when we break those key levels” near $30,000.

Kelly said:

“I don’t necessarily think that we will see as nearly as significant of a drawdown as we did in say, post-December 2017, early 2018, and into the end of that year. But I do think, just given the structure of the market, that we could potentially be in for a bit more short-term volatility and potentially some more headwinds here, in the near term.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.