The deputy governor of the Reserve Bank of India (RBI) has
revealed that the central bank is planning to launch a state-backed
digital currency in phases so that it would have “little or no
disruption to India’s banking or monetary systems.”
RBI Plans ‘Phased Implementation’ for Digital Rupee
- RBI Deputy Governor T. Rabi Sankar talked about India’s central bank
digital currency (CBDC) at the Vidhi Centre for Legal Policy on
Thursday, local media reported. - He explained that the “RBI has been exploring the pros and cons of introduction of CBDCs since quite some time,” elaborating:
RBI is currently working towards a phased implementation
strategy and examining use cases which could be implemented with little
or no disruption to India’s banking or monetary systems.
- According to the central bank, a CBDC “is the same as a fiat
currency and is exchangeable one-to-one with the fiat currency,” Sankar
described, adding that “Only its form is different.” - He noted that “Generally, countries have implemented
specific-purpose CBDCs in the wholesale and retail segments,”
emphasizing that “Going forward, after studying the impact of these
models, launch of general-purpose CBDCs shall be evaluated.” - The deputy governor further opined, “conducting pilots in wholesale and retail segments may be a possibility in near future.”
- Deputy Governor Sankar highlighted a few benefits of a central
bank-backed digital currency. They include reducing dependency on cash,
saving on the cost of money printing, and enhancing settlement
mechanisms. Another benefit is the elimination of the “time zone
difference” in foreign exchange transactions, which would result in a
cheaper and smoother international settlement system. - He also clarified that private cryptocurrencies, such as bitcoin, do
not fit the RBI’s definition of currency and one of the reasons central
banks worldwide, including India, are experimenting with CBDCs is to
minimize the risks posed by cryptocurrencies on traditional financial
systems. - source link : https://news.bitcoin.com/indias-central-bank-rbi-launch-digital-currency-in-phases/
