The Reserve Bank of India (RBI) Governor, Shaktikanta Das, has called on policymakers to reinforce its anti-crypto stance, citing it is a threat to the country’s economy.
At a BusinessToday event, the apex bank’s exec spoke about cryptocurrencies in a negative light. He admitted that they could easily replace fiat currencies. Das also expressed concerns about cryptos scooping a growing portion of the country’s money supply in circulation. His fear dwelled on the potential for this development to snatch the central bank’s money control. He mentioned that since most cryptos are dollar-denominated, it could lead to dollarization.
Indian Financial Execs Consider Crypto A Threat
“Assume a situation where 20% of our transactions in the economy… is taking place through cryptos which are not issued by the central bank but by private companies which are placed all over the world, the reserve bank being the monetary authority of the country as the central bank will lose control over 20% of the transactions in our economy.” Das iterated that.
In his argument, he mentioned that most Reserve bank policymakers believed that digital currencies were transient in their early days. His speech came as a warning to Indian authorities to tighten their grip on the adoption of digital assets within the country.
Das’ position only reinforces India’s hawkish disposition towards digital assets, just like some other countries. In November 2021, the RBI released the Cryptocurrency and Regulation of Official Digital Currency Bill. The bill aimed to facilitate the framework for creating a Central Bank Digital Currency while prohibiting all private cryptocurrencies in India. However, it allowed for the exception to promote the blockchain, the underlying technology.
Meanwhile, on September 2022, India’s Financial Stability Board announced that it was working on guidelines. These rules would serve as a framework that would shape the country’s financial landscape concerning digital assets. The government announced a flat 30% tax on all gains from crypto trades and a 1% tax deducted source. Even then, the RBI’s position remained the same.
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