By Nathan Ferguson
Officials from the RBI (Reserve Bank of India) have reportedly alarmed for another time regarding the adoption of crypto, which, according to their assertion, will consequently pave the way toward the local economy’s dollarization. As per a report published on Monday by the Economic Times’ Indian branch, citing anonymous sources, the concerns of RBI are centered around a situation where the cryptocurrencies (which are dominated by the United States dollar) are taking away a substantial proportion of the Indian rupee’s market share.
The publication mentions that the RBI officials as well as Shaktikanta Das (the governor of the agency) gave a briefing this week to the Parliamentary Standing Committee. In the respective briefing, they proposed a considerably fundamental viewpoint regarding the likely influence of crypto on the country’s financial system.
An anonymous official is referred to as stating that approximately the cryptocurrencies’ entirety is denominated by dollar and they are released on the behalf of the private bodies from abroad, which may subsequently pave the way toward the dollarization of a proportion of the Indian economy, being against the sovereign interest of the country. As per the official, the crypto will severely destabilize the capability of the RBI to devise monetary policy as well as regulate the country’s monetary system.
It seems that the RBI was irritated by the concept that the crypto would be utilized in transactions across the borders rather than the rupee, whereas they again indicated the usual anti-crypto remarks with the mention of drug trafficking, money laundering, as well as terror financing.
For the second time in the present month, an anti-crypto action has been expressed by the RBI, with Brian Armstrong – the CEO of Coinbase (a prominent crypto exchange) – proposing in the previous week that the sudden termination of the UPI (United Payments Interface) by the exchange in India was because of the stress imposed by the RBI. In his words, some days since the launch, they did take the action of their UPI’s termination as the RBI (which counts to be a Treasury equivalent in the country) forced the American crypto exchange.
The government in India also does not appear to be looking at digital assets with a favorable eye and has rather a comparatively strict approach for crypto since demarcating intentions regarding the regulation of the respective space in December.