The Reserve Bank of India will introduce its digital rupee central bank digital currency (CBDC) in a phased manner. The asset will go through proof of concept and pilot stages before being fully launched.
Discussing the plan, the Reserve Bank of India in its annual report said that CBDCs should be “consistent with its objectives of monetary policy, financial stability and efficient operation of currency and payment systems.”
Calling for the adoption of Digital Rupee through a graded approach, the CBDC will go through proof of concept and pilot phases before the official launch.
The central bank is examining the risks and benefits of CBDCs, and the Finance Bill of 2022 serves as the legal framework for asset launches.
“The introduction of CBDC has been announced in the Union Budget 2022-23 and an appropriate amendment to the RBI Act, 1934 has been incorporated in the Finance Bill, 2022. The Finance Bill, 2022 has been enacted, which provides a legal framework. Is.” Launch of CBDC,” the report reads.
A phased introduction of CBDCs is high on the agenda for 2022-23. India’s central bank first announced it would work on a CBDC earlier this year. India’s Finance Minister Nirmala Sitharaman has also said that she expects the digital rupee to be launched later this year.
Sitharaman said CBDCs have many advantages, and India is a technological country when it comes to payments. The country already has a wide user base for digital and app-based payments like China. Analysts also believe that introducing transparent public ledgers can reduce the circulation of counterfeit notes, which the RBI considers a problem.
India speeds up regulation
India has stepped up its intention to regulate the market, after confirming last year that it would not recognize bitcoin as a currency and assuring investors that the crypto would not be banned.
First, it taxed crypto, which many believe is too high. India’s crypto volumes have declined since the introduction of the tax scheme.
India believes that international cooperation is needed for regulation to be truly successful.
Instead, India’s lawmakers will take their time to create a regulatory framework for crypto. Full regulation may take years, but the country’s stance on digital assets is slowly starting to take shape after years of volatility leaving investors confused.