According to a Press Trust of India report, top officials of India’s central bank told a parliamentary committee on finance that cryptocurrencies can cause “dollarization” of a part of the economy which effectively would be against the country’s sovereign interest.
“Almost all cryptocurrencies are dollar-denominated and issued by foreign private entities, it may eventually lead to dollarization of a part of our economy which will be against the country’s sovereign interest,” officials said.
Furthermore, the report cites that central bank officials claim that cryptocurrencies could potentially become a medium of exchange and replace the rupee in financial transactions both domestic and cross border. The RBI officials said:
“It will seriously undermine the RBI’s capacity to determine monetary policy and regulate the monetary system of the country. It could replace a part of the monetary system undermining RBI’s capacity to regulate the flow of money in the system.”
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Source: Igaming
