According to an official of the Reserve Bank of India (RBI), they are planning a ‘phased implementation’ of their CBDC in both the retail and wholesale sectors of the market. In order to allow the Indian central bank to launch a pilot program and for issuing the central bank digital currency (CBDC), the RBI Act 1934 has also been subjected to some amendments.
The Ministry of Finance’s minister of state and an official of the Indian central bank gave independent updates on the progress of the central bank digital currency (CBDC) that the latter has been working on. Ajay Kumar Choudhary, the Executive Director of the RBI, talked about the CBDC on Wednesday at the PICUP Fintech Conference and Awards.
During his keynote address, he stated that the RBI would implement the CBDC in phases in both retail and wholesale segments. Similarly, the upper house of the Indian parliament, Rajya Sabha, also received an update from the Ministry of Finance’s Pankaj Chaudhary on Tuesday. The minister of state also said that the central bank of India would implement the announcements that were made in the budget speech in phases.
Nirmala Sitharaman, the Finance Minister of India, announced the development of a central bank digital currency (CBDC) in the country during the Union Budget 2022-2023 speech. The RBI Act, 1934 had then been amended through the Finance Bill 2022 in order to give the central bank the freedom to pilot and eventually issue a digital currency.
T. Rabi Sankar, the Deputy Governor of the RBI, had said in June that the launch of a CBDC would eliminate whatever little case there was for the existence of private cryptocurrencies. The term private cryptocurrencies is used by the Indian central bank and government to refer to cryptocurrencies that are not issued by the state, including Bitcoin (BTC) and ether (ETH).
In May, the Reserve Bank of India (RBI) warned that the Indian economy could become dollarized because of cryptocurrencies. Shaktikanta Das, the Governor of the RBI, had stated earlier this month that cryptocurrencies are quite dangerous. He said that anything that does not have any underlying asset and derives value on make-believe is only speculation and has just been given a sophisticated name.
It is a well-known fact that the Indian central bank does not have a favorable opinion of cryptocurrencies. As a matter of fact, it has been opposed to them outright and it is because of them that it decided to pursue a central bank digital currency (CBDC), as it believes it would fulfill the need. The RBI has also proposed banning cryptocurrencies previously.
However, the finance minister of the country had spoken earlier this week in the parliament about a ban. She said that any legislation introduced for imposing a crypto ban would only be effective via international collaboration. She said that the benefits and risks would have to be evaluated, along with the evolution of common standards and taxonomy.