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Know what can be the consequences of cryptocurrency on the economy, RBI gave shocking information

The chief officer of RBI placed his point before the parliamentary panel

Top officials of the Reserve Bank of India (RBI) have told a parliamentary panel that cryptocurrency could “dollarise” a part of the economy which is against India’s fundamental interests. Sources said top officials including RBI Governor Shaktikanta Das, headed by former minister Jayant Sinha, made representations before the Parliamentary Standing Committee on Finance. He spoke in support of the US coalition, but said it was important for cryptocurrencies to maintain some independence. According to a member of the committee, RBI officials said this could seriously harm the central bank’s ability to set monetary policy and control the country’s financial system.

He further added that cryptocurrencies have the potential to become a medium of exchange and can replace the rupee in financial transactions both locally and across borders. Central bank officials said the currency could take over the financial system and undermine the ability of the RBI to control the flow of money in the system. Reserve Bank officials warned that cryptocurrencies could be used for terror financing, money laundering and drug trafficking, and could pose a serious threat to the stability of the country’s financial system. He told the parliamentary committee, “Almost all cryptocurrencies are dollar-based and declared by foreign private entities. In such a scenario, it is possible that some part of our economy will lead to dollarization which will be against the sovereign interests of the country. “

RBI officials said cryptocurrencies will also have a negative impact on the banking system. People can put their hard earned money into crypto, resulting in a lack of funds to lend to banks. In this year’s budget, Finance Minister Nirmala Sitharaman announced a 30 percent tax on cryptocurrency turnover and assets associated with it. An estimated 1.5 million to 20 million people invest in cryptocurrencies in the country, with approximately 5.34 billion in cryptocurrency. There is no official data available about the size of the crypto market in India. The parliamentary committee is in further discussions with the finance regulators.

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Shivam Bangwal

Shivam Bangwal is an Indian based entrepreneur who is a tech, travel and coding enthusiast with a post graduation degree on Master's of Computer Applications. He is a founder of Youthistaan, People News Chronicle, Hitchhike TV, Branding Panther and many more.
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