Indian Government Fears That Cryptocurrencies Might Undermine the Indian Currency

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Cryptocurrencies are well known for its risk causing properties like the money laundering to terror financing. It has been thought that the digital coins can be replaced with the fiat money. But the top bureaucrat, Subhash Chandra Garg, believes that the digital coins could have a high impact on the Indian currency which further could destabilize rupee if they are used to make the payments. Mr. Garg is the economic affairs secretary in the ministry of finance under whom a panel was set up in November in the year 2017.

The fear was strengthened when a report was released in the March last year by the Bank of International Settlements Settlements (BIS). BIS is the center of solution for the central banks of the world which is usually concerned with the stability of the global financial system. The Reserve Bank of India is also a member of the BIS along with the other 59 banks. The report stated that the Cryptocurrencies can be issued and used one day by the policymakers only to settle payments amongst the financial institutions. But there is a fact of intimidation that the digital coins or the Cryptocurrencies might undermine the Indian currency, rupee and could possibly destabilize the traditional banks if the digital coins are permitted to use widely amongst the general public.

According to the ecosystem of Cryptocurrencies, it is believed that the destabilization might occur someday due to the wide use of the virtual currency but it would not be seen in the near future. In many cases, the Indian government has clearly denied these new age coins to be the legal tender as it is like using foreign currencies in Indian system which is absolutely not possible however.

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