RBI officials have expressed concern about the challenges of cryptocurrencies, stating that they could lead to the dollarization of some parts of the Indian economy, PTI reported. RBI officials expressed concern on May 16 at a meeting of Parliament’s Permanent Finance Committee, chaired by former Finance Minister Jayant Singha. High-ranking RBI officials, including Governor Shaktikanta Das, warned that cryptocurrencies could reduce the likelihood of RBIs guiding and regulating monetary policy and the country’s monetary system. They said crypto-assets can pose a serious challenge to the stability of the country’s financial system. The Commission emphasized the various impacts and threats of the crypto market on India’s economy and banking system:
* Bankers say that most cryptocurrencies are denominated in dollars and are issued by foreign private companies, which could lead to some dollarization of the Indian economy, which adversely affects the interests of the sovereignty of the country. Said there is a possibility.
* They further argued that crypto asset classes are very attractive and people may want to invest their hard-earned savings in them. This allows banks to lend less money and can adversely affect the banking system.
* The Commission also investigated the Securities and Exchange Commission of India (SEBI) on crypto-related issues.
* RBI officials pointed out that one of the threats to cryptocurrencies is that they can also be used for money laundering, terrorist financing, and drug trafficking.
* They also warned that cryptocurrencies could be used as a medium of exchange and replace the rupee (INR) in both domestic and cross-border financial transactions in the future. There is no official data on the total number of crypto users and investors in India, but Forbes says there are about 15-20 million crypto investors in India, with a total of about $ 5.34 billion in crypto. Reported to India. The government has imposed a 30% tax on cryptocurrency income and a 1% TDS on payments for transfers of crypto assets that exceed certain thresholds.