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India’s central bank, the Reserve Bank of India (RBI), is working on a “phased implementation of a central bank digital currency (CBDC) in both wholesale and retail segments.” Necessary amendments have been made in the RBI Act, 1934 to allow the central bank to pilot and issue a digital currency.
A Reserve Bank of India (RBI) official and the Prime Minister’s Finance Ministry have independently provided an update on the central bank’s progress in issuing a digital central bank currency (CBDC).
RBI Managing Director Ajay Kumar Choudhary was quoted by local media as saying during a keynote address at the PICUP Fintech Conference and Awards on Wednesday:
RBI is working on phased implementation of a central bank digital currency (CBDC) in both wholesale and retail segments.
Pankaj Chaudhary, minister of state in the finance ministry, similarly told the Rajya Sabha, the upper house of India’s parliament, on Tuesday that “the RBI has started work on a phased implementation of the announcement made … in the 2022-23 budget speech. “
Indian Finance Minister Nirmala Sitharaman announced the launch of the country’s CBDC in the Union Budget 2022-23. Necessary amendments were later made in the RBI Act, 1934 with the passage of the Finance Bill 2022 to allow the central bank to pilot and issue a CBDC.
In June, RBI Deputy Governor T. Rabi Sankar said the central bank believes that “CBDCs would actually be able to kill what little case there might be for private cryptocurrencies.” The Indian government and central bank refer to non-government-issued cryptocurrencies, including bitcoin (BTC) and ether (ETH), as private cryptocurrencies. The RBI also warned in May that crypto could lead to the dollarization of part of the Indian economy.
Earlier this month, RBI Governor Shaktikanta Das said: “Cryptocurrencies are a clear danger. Anything that gains value based on notions, with no underlying basis, is just speculation under a sophisticated name.”
The Indian central bank has repeatedly stated that cryptocurrencies should be banned. However, the country’s finance minister told parliament earlier this week that “any legislation for regulation or for prohibition can be effective only after significant international cooperation on the evaluation of the risks and benefits and the development of common taxonomy and standards”.
What do you think about how the RBI plans to implement a CBDC? Let us know in the comments section below.
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