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RBI governor says crypto not useful for developing economies like India

Shaktikanta Das, governor of the Reserve Bank of India, stated in a recent interview with Hindustan Times that developing nations like India are in a different position than mature economies when the topic of dollarization of the economy is dragged up  on August 24. His statement shocked many crypto investors as it only came after a day  after the Kucoin report estimated that there are around 115 million crypto investors in India.

He remarked:

“When talking about the dollarization of the economy, developing economies like India are in a different position than advanced economies. If I were sitting on the other side of the world and in the US, I would be extremely happy; however, if I were in India, I would not be happy either as an individual or as a central banker. It is not a favourable development for our economy. Since all cryptocurrencies are, for the most part, pegged in the dollar, they will not benefit developing market economies like India.”

The central bank had also cautioned a parliamentary panel in May that cryptocurrencies, particularly stablecoins, would unintentionally “dollarize” the economy. The governor of the central bank of India also emphasised that while supporting innovation in fintech, RBI has evaluated the different types of risks prevalent in the growing digital market and is trying to find the best way to determine how well they can be managed.

Das concluded:

“I would like to believe that a significant number of people would have taken note of the warning signals and the concerns expressed by the Reserve Bank and I would like to believe and anecdotally we are aware that many people did not invest in crypto or of pulled out of crypto, thanks to the kind of caution and concerns that emanated from the Reserve Bank.”

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Vaishali Goel
Technology enthusiast, explorer and academic scholar. Currently exploring the crypto world. Join me in my journey to see how crypto, NFT and Metaverse will change the world.


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