India’s central bank, the Reserve Bank of India (RBI), has published a booklet with a section on cryptocurrency and the digital rupee. The central bank acknowledged that cryptocurrencies have gained popularity in recent years and confirmed that it is exploring the need for a central bank digital currency.
RBI says Crypto has gained popularity and explored digital rupees
The Central Bank of India released a “Booklet on Payment Systems” on Monday with a section on Central Bank Digital Currencies (CBDCs). The document covers “the journey of payment and settlement systems in India during the second decade of the millennium, namely from the beginning of 2010 to the end of 2020,” the RBI described.
Part of the booklet reads:
Private digital currencies (PDCs) / virtual currencies (VCs) / cryptocurrencies (CCs) have become popular in recent years. In India, regulators and governments have been skeptical of these currencies and concerned about the associated risks.
However, the central bank confirmed:
Nonetheless, RBI is investigating whether there is a need for a digital version of fiat currency and, if any, how to operationalize it.
The RBI booklet describes a CBDC as “legal tender and central bank debt in digital form, denominated in a sovereign currency and appearing on the central bank’s balance sheet”. The central bank added, “Innovations are rapidly changing the payment space. This has prompted central banks around the world to investigate whether they could leverage technology and spend fiat money in digital form. “
This is not the first time the central bank of India has mentioned the digital rupee. In December 2019, RBI Governor Shaktikanta Das said “It is an area that the Reserve Bank will certainly consider seriously at an appropriate time.”
India still does not have a cryptocurrency regulatory framework. A concept bill was filed with the Ministry of Finance in early 2019, but the government has not introduced the bill. Meanwhile, the country’s Supreme Court has issued the banking restriction on the crypto industry by the central bank in March last year. Recently there were reports that the Central Economic Intelligence Bureau, a branch of the Treasury Department, has suggested imposing an 18% Goods and Services Tax (GST) on bitcoin transactions.
Do you think a digital rupee will be good for the crypto industry? Let us know in the comments below.
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