RBI warns cryptocurrencies can lead to dollarization of economy

05/15 11:41

Top Reserve Bank of India (RBI) officials have told a parliamentary panel that cryptos can lead to "dollarisation" of a part of the economy, which would be against the country's sovereign interest, according to a PTI report. Briefing the Parliamentary Standing Committee on Finance chaired by former minister of state for finance Jayant Sinha, top officials of the RBI, including its governor Shaktikanta Das, clearly expressed their apprehensions about cryptocurrencies and said these pose challenges to the stability of the financial system, the report added. A member of the panel quoted RBI officials as saying: "It will seriously undermine the RBI's capacity to determine monetary policy and regulate the monetary system of the country." Pointing out that cryptos have the potential to be a medium of exchange and replace the rupee in financial transactions both domestic and cross border, central bank officials said these currencies "can replace a part of monetary system it will also undermine the RBI’s capacity to regulate the flow of money in the system".
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