The Reserve Bank of India (RBI) is actively working on a digital currency and will make a decision “very soon”, the central bank has reportedly confirmed. Meanwhile, payment giant Paypal is discontinuing its payment services in India.
Announcement RBI Near Digital Rupee
As the Indian government prepares introduce The cryptocurrency bill that aims to both ban cryptocurrencies and create a regulatory framework for the digital rupee to be issued by the RBI, the central bank has made its own announcement.
RBI Deputy Governor BP Kanungo said Friday:
An internal committee is closely examining the central bank’s digital currency model and you will hear from the Reserve Bank on the matter very soon.
RBI Governor Shaktikanta Das also spoke about digital currency on Friday. “As for digital currencies, I think we’ve already released our document,” he told reporters. “Our digital payment document indicates that RBI is working on digital currency.”
RBI Governor probably referred to “Booklet on Payment Systems” provided by the central bank published last week. In the document, the RBI acknowledged that cryptocurrencies have gained popularity in recent years and clarified that it “is exploring the possibility of whether there is a need for a digital version of fiat currency and, just in case, how to operationalize it. “
Paypal is leaving the Indian domestic payments market
Another change in the Indian payments market is the departure of global payments giant Paypal, which has announced it will shut down domestic services in India. The Hindu Business Line reported Friday that Paypal’s decision came at a time when digital transactions hit new records every month.
A Paypal spokesperson said, “As of April 1, 2021, we will focus all our attention on enabling more international sales for Indian companies, and shift focus to our domestic products in India,” added:
This means that from April 1 we will no longer offer domestic payment services within India.
The San Jose, California-based company launched its domestic operations in India in 2017, and problems with the RBI began in 2011 when the central bank asked the company to comply with the Foreign Exchange Management Act 1999, the publication said.
Paypal was getting ready to roll out its UPI platform when the National Payments Corporation of India (NPCI) imposed a new set of rules in November last year. The rule states that “third-party applications offering payment services through UPI will be able to process up to 30% of transaction volumes from January 1, 2021,” the news outlet explained, speculating that “this appears to have been the nail in Paypal’s plans for India.”
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