Digital currencies can lead to “dollarisation” of a part of the economy which would be against India’s sovereign interest, high-ranking representatives of the RBI have told a parliamentary panel, as per sources.
Briefing the Parliamentary Standing Committee on Finance chaired by former minister of state for finance Jayant Sinha, high ranking representatives of the RBI, including its lead representative Shaktikanta Das, obviously communicated their apprehension about cryptocurrencies and said these pose challenges to the stability of the financial system, sources told PTI.
“It will seriously undermine the RBI’s capacity to determine monetary policy and regulate the monetary system of the country,” a member of the board cited RBI officials as saying.
Pointing out that cryptocurrencies can possibly be a mode of exchange and supplant 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 likewise undermine the RBI’s capacity to regulate the flow of cash in the system”.
Cautioning that besides being used for, money laundering, cryptos pose a greater danger to the strength of the financial system of the country, the central bank officials said.