Reserve Bank of India (RBI) is strongly opposing cryptocurrency as it is believed that crypto is a threat to the financial stability of the country. Once the crypto starts moving freely, it would adversely affect the central bank’s monetary policy. Other major concerns raised by RBI are related to acute price volatility and challenges in tracing transactions.
RBI has the great concerns over financial, legal, and security risks of cryptocurrency. The crypto poses a great threat to India’s macroeconomic and financial stability. It believes that virtual currencies would also weaken banks and other regulated entities. The IMF chief economists further added that managing foreign exchange risk will be a big challenge given that money would flow in via digital currency.
The legal experts believe that the government must have a balanced approach towards the crypto so that investors are not hurt and at the same time make sure it does not grow uncontrollably. If it continues to grow uncontrollably as it could threaten the country’s foreign exchange reserves and result in disruptions in the economy.
