Cryptocurrencies may lead to "dollarization" of part of the economy, which could go against the country's sovereign interests, top Reserve Bank of India officials told a parliamentary finance committee, according to the Press Trust of India.
- "Almost all cryptocurrencies are dollar-denominated and issued by foreign private companies. This may eventually lead to dollarization of a part of our economy, which is against the sovereign interests of the country," the officials told members of the finance committee, including Jayant Sinha, chairman of the parliamentary standing committee on finance.
- Top Reserve Bank of India (RBI) officials reiterated their "institutional view that cryptocurrencies should be banned," a source familiar with the matter told CoinDesk.
- Amid the "crypto crash" last week, central bank officials said cryptocurrencies have the potential to become a medium of exchange and replace the rupee in financial transactions both domestically and cross-border, the report said.
- "They will seriously undermine the RBI's ability to set monetary policy and regulate the country's monetary system," it said. It could replace part of the monetary system and undermine the RBI's ability to regulate the flow of money in the system," RBI officials said.
- Earlier this month, CoinDesk reported on how the Parliamentary Finance Committee had "reprimanded" representatives of India's crypto industry for overstating the importance of crypto advocacy without addressing challenges such as terrorism and money laundering through crypto.