Speeches & Media Interactions

Distinguished guests and my colleagues, Namaste and a very good afternoon! It is a privilege to address this illustrious gathering at College of Supervisors’ Third Annual Global Conference convened around the theme of ‘Adapting the Regulation and Supervision to the Digital Age’.

Respected Governor; Deputy Governor, Shri S C Murmu; Chairman, Academic Council, College of Supervisors, Shri Arijit Basu; and members of the Academic Council of CoS Director, CoS, Shri R. Subramanian; Distinguished speakers, panellists and Managing Directors & CEOs of Regulated Entities; My fellow colleagues from RBI, Ladies and Gentlemen. A very good morning to all of you. It is a pleasure to be with you today at the third edition of the annual global conference of the College of Supervisors of the Reserve Bank of India.

Good morning and Namaskar. It is my privilege to address the third annual global conference of the College of Supervisors. 2. Advancement in technology is impacting all spheres of human activity – personal, business and public. Financial system is no exception. Technology has revolutionised banking over the years. Yet, today's landscape is distinct - the pace and scale of change are unprecedented. Technology has introduced new products, partners, and processes.

I. Introduction Distinguished industry leaders, colleagues and guests. 1. It is a privilege to be able to stand here and talk to such a learned gathering and I am thankful to Mint for inviting me. 2. Money, as we know it, has been a central pillar of human society for centuries, enabling trade, facilitating economic activity, and underpinning the very notion of trust in social and financial interactions. Over time, the form of money has evolved with technology - from commodities to metal to paper to balances in deposit accounts to now, digital tokens. While the forms of money have evolved with technology, the fundamental character of money - what it represents, or what gives it credibility – has always been that it represents value that has users’ trust. That value is either intrinsic (metal money) or derived from a promise to pay (paper money or deposit money) by a trusted person. Theoretically, money can be issued by any person as long as he has the trust of the users. The more stable forms of money in history have, however, always been issued by sovereigns, not by private issuers. Examples of private money (money issued by non-sovereigns) can be found in history but they have not been stable arrangements. In practice, therefore, money has credibility because its value is promised by the sovereign. 3. This fundamental character of money is under challenge from cryptocurrencies. Not in terms of technology, as money in the form of digital tokens can exist without changing the nature of money itself. But the fundamental challenge of cryptocurrencies is that they claim to change the very nature of money – because cryptocurrencies do not represent value either in terms of intrinsic worth or in terms of promise to pay. In my talk today, I propose to explore what the nature of such challenge is, and what are the implications of cryptocurrencies for the financial system as we know it. 4. To be able to understand the nature or character of money, we need to look a little deeper.