A recent statement issued by the Reserve Bank of India suggests that the increasing influence of cryptocurrencies in the economy of India is going to hinder the monopoly of the state as a centralized legal tender monitor.
The central banking enterprise of India has long been against the development and growth of cryptocurrencies in the region.
In its recent statement, the RBI officials have reiterated their previous position on the matter with intensified interest.
This time around, the Indian Central bank stated that the economy of the country could be dollarized due to the increasing demand for cryptocurrencies among Indian consumers. The report was published by a local media outlet called Economic Times recently.
RBI is Working on Plans to Discourage Crypto Dollarization
A recent report published by Economic Times suggests that the RBI officials are working internally to introduce policies that can address the matter of crypto dollarization of the Indian economy.
Furthermore, the Central Banking authority is working to discourage the market dominance of USD-based cryptocurrencies within the Indian economy.
To this end, a dedicated publication issued by the serving RBI governor Shaktikanta Das was presented during a recent Parliamentary Standing Committee to discuss finance-related methods.
Economic Times reporters quoted unnamed RBI officials from the meeting that suggests that all major cryptocurrencies are backed by USD and are issued by foreign exchange platforms.
Another unnamed official was reported to have claimed that eventually, these foreign cryptocurrencies will capture a sizeable part of the Indian economy that can negate the writ of economic sovereignty of the country.
The Central banking officials of India are issuing their reservations about the increasing number of foreign transactions taking place in the form of cryptocurrencies.
To take advantage of the monumental remittance fee differences, the citizens of India are ditching conventional services like Western Union and switching to cryptocurrencies rather than using the Indian rupee.
On the other hand, the cryptocurrency agencies operating in India are facing increasing pressure from state policymakers. The Indian government has levied as much as 70% taxes in lieu of GST and Capital gains.
Furthermore, Coinbase CEO Brain Adams recently complained that the revocation of UPI or United Payments Interface happened due to the behind-the-scenes involvement of RBI officials.