Bitcoin’s Role as Currency Debated Amid Market Volatility
Bitcoin: Currency or Technological Innovation?
The RBI’s Deputy Governor, T. Rabi Sankar, recently articulated a perspective that challenges the conventional view of Bitcoin as a currency. According to Sankar, Bitcoin lacks the intrinsic value that underpins traditional currencies. Instead, he posits that Bitcoin serves more as a technological demonstration, showcasing the potential of blockchain technology rather than functioning as a medium of exchange or store of value.
Stablecoins and the Challenge of Price Stability
In addition to Bitcoin, the RBI’s critique extends to stablecoins, which are often pegged to traditional assets like the US dollar to mitigate volatility. Sankar argues that stablecoins fall short of meeting the standards of traditional money due to risks such as price instability and potential interference with monetary policy. This perspective underscores the RBI’s preference for sovereign currencies, which are backed by central authorities and offer a level of stability that cryptocurrencies currently lack.
Market Cycles and Bitcoin’s Price Trends
Despite the RBI’s skepticism, Bitcoin continues to attract significant attention from investors and traders alike. Historical data suggests that Bitcoin’s price trends often align with broader market cycles, including liquidity cycles that can drive rallies and corrections. For instance, periods of increased liquidity in global markets have frequently coincided with surges in Bitcoin’s price, as investors seek alternative assets with high growth potential.
Regulatory Perspectives and Future Outlook
The RBI’s stance reflects a broader trend among central banks and regulatory bodies worldwide, many of which remain cautious about the adoption of cryptocurrencies. However, the landscape is evolving, with some countries exploring the integration of digital currencies into their financial systems. As regulatory frameworks develop, the future of Bitcoin and other cryptocurrencies will likely be shaped by a complex interplay of technological innovation, market dynamics, and policy decisions.
The debate over Bitcoin’s role as a currency underscores the ongoing evolution of the cryptocurrency market. While regulatory bodies like the RBI express skepticism, market cycles and investor interest continue to drive Bitcoin’s price trends. As the landscape matures, staying informed about regulatory developments and market dynamics will be essential for investors navigating the complexities of the crypto space. For those looking to deepen their understanding, exploring resources on blockchain technology and stablecoins can provide valuable insights.
Published: December 14, 2025
