Cryptos will lead to financial instability, dollarization of the economy, says RBI Governor

economictimes.indiatimes.com:

RBI Governor Shaktikanta Das has lashed out at crypto assets once again. In an interview with ET Now, Das reiterated his concerns over the crypto assets. The RBI chief said, "cryptos may lead to dollarization of the developing countries like India as the prices of crypto tokens are mostly denominated in dollars." He said that this will create serious financial instability in the country. The RBI governor also added that cryptos pose a serious risk for small investors who are prone to lose their money. «This may favour me if I am sitting in the other part of the world, but not here,» he said. «This will work in the favour of an advanced economy,» he added.

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Das’ comments do not come as a surprise as RBI has always been a vocal critic of crypto assets. The comments came at a time when the crypto prices had hugged the volatility again. The prices of major crypto tokens have plunged as much as 20 per cent in the last five sessions. The global crypto market capitalization was barely above the $1 trillion mark and Bitcoin has been holding $21,000 levels lately. However, the altcoins have taken an intense beat-down over the renewed inflationary worries. The RBI governor briefly expressed his happiness on the fact that a large number of people have taken a serious note over the apex lender's warnings on the cryptos. However, he emphasized that cryptos can create a lot of financial instability in terms of the ability to determine the monetary