The Economic Times published a new article focusing on bank privatization, crypto, UPI, and other related topics. The part about the RBI governor discussing cryptocurrencies is one of the most important parts of the article.
There are Still Opposing Opinions
There has been an interview conducted with Shaktikanta Das on various financial issues that have arisen in the past. His opinion about cryptocurrency is the topic of one of the questions, in which he states that he has called crypto dangerous in the past.
According to him, the financial sector could be affected by this, as he has used the word instability in the description. The comment was made at a time when there was a huge difference between the price levels of cryptocurrencies.
Price points and participation levels have changed as a result of these changes. Nevertheless, there is still the question of whether Das holds the same opinion now that the prices have changed from one level to another.
In Das’ opinion, it is a good thing that warning signals were generated, and he believes that a large number of people would have heeded the warning signals and expressed concerns in response to the Reserve Bank’s concerns.
Due to the kind of caution and concerns that emanated from the Reserve Bank, he adds, many people have not invested in crypto or have pulled out of crypto due to their concerns.
According to the RBI governor, cryptocurrency can pose a lot of problems for the central bank’s ability to determine monetary policy in terms of the ability to effectively implement the currency’s principles.
There is also the possibility of it adversely impacting our exchange rate, capital flows, and the stability of our banking sector, as well as the potential for it to be used as a tool for money laundering and for illegal funds transfers.
Blockchain technology is not a threat to Shaktikanta Das, however. The technology of blockchain is considered to have a variety of uses, according to him. Due to the fact that the technology has already been capitalized on, concerns have already been raised about its potential.
As far as the dollarization of the economy is concerned, countries like India are in a different position than advanced economies. Das said:
“If I am sitting at the other end of the globe and if I am in the US, I will be very happy, but if I am in India, I would not be happy whether as an individual or as a central banker. It is not a good thing for our economy to happen.”
Since all the cryptocurrencies are denominated in hard currencies and in the large dollar, the RBI governor believes that it will not work in favor of emerging market economies such as India because it is not a currency that is denominated in the hard currency. As a result, advanced economies may be able to benefit from it.