RBI’s Gandhi thinks blockchain’s capabilities are being ‘overstated’

A deputy governor of the Reserve Bank of India has said he believes the potential of blockchain in the field of digital currencies is being "overstated".

Speaking at the Fintech Conference 2017 in Mumbai, R Gandhi argued against the view that blockchain is the "death knell of currency".

Gandhi has been a strong advocate of the benefits blockchain could reap for the financial industry, but he believes virtual currency – when issued without the governance of a central bank – would pose "potential financial, operational, legal, customer protection and security-related risks".

Virtual currencies are "prone to losses arising out of hacking, loss of password, compromise of access credentials and malware attack," he said. He also questioned the network's legal status, its value, which seems to be "a matter of speculation", and how it could be used to fund illicit and illegal activities.

However, the deputy said there was some "realisation" in the fintech industry that there could be drawbacks to "exaggeration" of fintech's capabilities.