The Reserve Bank of India (RBI) aims to issue a digital version of the rupee, with pilot projects for a central bank digital currency (CDBC) starting this year, according to India’s finance minister, Nirmala Sitharaman.
Sitharaman said the adoption of the digital currency would provide a big boost to the digital economy while also resulting in a more efficient and cost-effective currency management system during the Budget 2022 debate in Parliament.
The minister did not specify how the digital rupee would function or appear, but she did suggest that it will be deployed using blockchain and other technologies and that it might go live this year.
She said, “It is proposed to introduce digital rupee using blockchain and other technology to be issued by the Reserve Bank of India starting 2022-2023.”
According to CapitalVia Global Research, RBI is “weighing numerous issues pertaining to the scope and regulatory structure of the envisaged digital currency, which would likely coexist with cash and digital payment systems,” according to the Times of India.
The government’s principal economic adviser, Sanjeev Sanyal, claimed that the government will take a balanced approach to the subject of cryptocurrency legislation because it has ramifications for the country’s financial stability.
After years of waffling, the government has decided to introduce a so-called central bank digital currency (CBDC).