The Reserve Bank of India has published a booklet with a section speaking exclusively about cryptocurrencies. The central bank through the booklet acknowledged that cryptocurrencies have gained in popularity in the last few years and confirmed that it was exploring them.
Indian CBDC on the way
The booklet further revealed that India’s top bank was also considering the launch of its own Central Bank Digital Currency (CBDC). The booklet was titled “Booklet on Payment Systems” which covered “the journey of payment and settlement systems in India during the second decade of the millennium, viz., from the beginning of 2010 till the end of 2020.”
The booklet acknowledged the rise in popularity of private digital currencies, as well as, cryptocurrencies though Indian regulators and the government have been skeptical and have worked to play it down. In an unexpected turn of events, the Indian top bank confirmed that it was looking into cryptocurrencies and was exploring the possibility of a digital version of its fiat currency (the Indian Rupee).
The booklet went on to describe what a Central Bank Digital Currency (CBDC) in the bank’s view was, terming it as “a legal tender and a central bank liability in digital form denominated in a sovereign currency and appearing on the central bank’s balance sheet.” The bank added that “Innovations are changing the payments space rapidly. This has made central banks around the world to examine whether they could leverage on technology and issue fiat money in digital form.”
Changing attitudes towards crypto in India
This marks the second time within a space of two years that India’s top bank has mentioned the possibility of a digital rupee. Back in 2019, the central bank’s governor Shaktikanta Das said that digital currencies was an area the bank would look to explore exhaustively at the appropriate time. Despite a draft bill that lay down India’s potential crypto framework being tabled back in 2019, little progress has been made.
The RBI’s interest in a Central Bank Digital Currency, however, marks a huge change in attitude towards cryptos. Recent utterances are far removed from the bank’s zero tolerance attitude towards cryptos, just three years ago. Whether a digital rupee sees the light of day soon depends on political as well as regulatory will.
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