20 July 2026
RBI Says Cryptocurrencies Could Lead to Dollarization of Indian Economy
The Reserve Bank of India (RBI) has once again warned regarding Crypto adoption. RBI believes that Cryptocurrency will ultimately lead to the “dollarization” of the local economy.
According to the sources, the RBI is more focused on U.S. dollar-dominated Cryptocurrencies taking away market share from the Indian rupee.
This week RBI officials and its governor Shaktikanta Das gave a briefing to the Parliamentary Standing Committee on Finance. They took a very skeptical stance toward Crypto’s potential influence on the financial system. One of the officials said, “Almost all cryptocurrencies are dollar-denominated and issued by foreign private entities, it may eventually lead to dollarization of a part of our economy which will be against the country’s sovereign interest. It will seriously undermine the RBI’s capacity to determine monetary policy and regulate the monetary system of the country.”
RBI has been against the Crypto being used in cross-border transfers instead of the rupee, and the common anti-crypto tropes of money laundering, terror financing, and drug trafficking were also highlighted again.
Also, RBI’s pressure over Coinbase’s United Payments Interface (UPI) led to the stoppage. Brian Armstrong said, “So a few days after launching, we ended up disabling UPI because of some informal pressure from the Reserve Bank of India (RBI), which is kind of the Treasury equivalent there. Doft pressure behind the scenes to try to disable some of these payments which might be going through UPI.”
Last month, the government imposed a 30% Crypto tax on digital asset holdings and transfers, along with several guidelines. The trading volume on top Indian Crypto exchanges declined as much as 70%.
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.
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