Crypto woes
This refers to ‘Crypto chaos’ (March 6). The Trump administration’s decision to rescind the earlier US policy on framing global regulations for cryptocurrencies and prohibiting Central Bank Digital Currencies (CBDCs) is an unfortunate move. While cryptocurrencies exhibit certain characteristics of financial assets, their price movements are primarily driven by demand and supply, making them highly volatile, risky and speculative in nature. Hedging such an asset based solely on these factors undermines the utility of derivative products and may lead to regulatory challenges.
In this context, treating cryptocurrencies like strategic reserves — similar to crude oil — carries significant risks.
The Reserve Bank of India has consistently raised concerns about the financial stability risks posed by cryptocurrencies.
Srinivasan Velamur
Chennai
Delimitation issue
‘Why is South against delimitation’ (March 6) provides better clarity in the crucial issue of delimitation. No State or region could be so generous to give up its strength in the law-making bodies. However, the present status of some constituencies having abnormal number of voters and some others left with unbelievably small number like Lakshadweep is neither logical nor rational. Therefore a nationwide discussion should take place to arrive at a reasonably fair formula to avoid depriving any State or region of its due share of representation.
AG Rajmohan
Anantapur, AP
Infusing liquidity
The decision of the RBI to infuse ₹1.87 lakh crore into the banking system through open market operations is no doubt welcome. It is following a ‘cheap money policy’ to enhance consumption, investment, employment, output and growth. However, it is imperative the state ensures adequate supply of essential commodities, as increase in money supply without corresponding increase in real income can trigger inflationary spiral in the economy. The RBI and the government should handle the situation deftly.
S Ramakrishnasayee
Chennai
Retaliatory tariff
Trump has vowed to impose reciprocal tariffs on India, accusing India of levying high tariffs on American exports to India. Such a move would be detrimental to US-India bilateral trade. But India isn’t keen on imposing retaliatory tariff and wants across-the-table negotiations with the US. India currently enjoys a trade surplus with the US and must not lose it with a tit-for-tat approach.
NR Nagarajan
Sivakasi, TN