The Reserve Bank of India said about the danger of “dollarization” of the economy when using digital currencies

Digital currencies can cause a partial “dollarization” of the Indian economy, which does not correspond to the state’s sovereign interests. The management of the Reserve Bank of India (RBI) made such an announcement as part of a briefing for the Parliamentary Committee on Finance.

According to RBI manager Shaktikanta Das, digital currencies will disrupt the stable functioning of the financial system. The active use of cryptocurrencies as investment assets and as means of payment will negatively affect the RBI’s determination of monetary policy and the regulation of the republic’s currency system. Replacing the rupee with digital currencies in inward and international transactions will lead to the following results: Also, RBI representatives continue to focus on the use of cryptocurrencies in the financing of terrorist organizations, drug trafficking and psychotropic substances, and money laundering. According to high-ranking officials, digital currencies endanger the country and should be banned. There is no official information about the Indian crypto market size. Some sources claim that up to 20 million digital currency holders in the country have total assets of up to $5.3 billion.