The deputy governor of the Reserve Bank of India (RBI) revealed that the central bank is planning to launch a state-backed digital currency in phases, so as to “have little or no interference with India’s banking or monetary system.”
RBI plans to “implement in phases” for the digital rupee
- According to local media reports, T. Rabi Sankar, Deputy Governor of the Reserve Bank of India, spoke about India’s Central Bank Digital Currency (CBDC) at the Vidhi Legal Policy Center on Thursday.
- He explained that “RBI has been exploring the pros and cons of introducing CBDC for a long time,” and explained in detail:
RBI is currently working to develop a phased implementation strategy and study use cases that can be implemented with little or no disruption to the Indian banking or currency system.
- According to the Central Bank, CBDC “is the same as legal tender and can be exchanged one-to-one with legal tender,” Sankar described, adding that “it’s just a different form.”
- He pointed out that “in general, countries have implemented specific-purpose CBDCs in the wholesale and retail sectors” and emphasized that “in the future, after studying the impact of these models, the introduction of general-purpose CBDCs should be evaluated.”
- The deputy governor further believed that “in the near future, it may be possible to conduct pilot projects in the wholesale and retail sectors.”
- Deputy Governor Sankar highlighted some of the benefits of digital currencies supported by the central bank. They include reducing dependence on cash, saving money printing costs, and strengthening settlement mechanisms. Another benefit is the elimination of “time zone differences” in foreign exchange transactions, which will lead to a cheaper and smoother international settlement system.
- He also clarified that private cryptocurrencies such as Bitcoin do not meet the Reserve Bank of India’s definition of currency. One of the reasons why global central banks, including India, are experimenting with CBDC is to reduce the risk of cryptocurrency to the traditional financial system. lowest.
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