India is just not that into crypto these days. Or, perhaps, not yet.
Nirmala Sitharaman, India’s finance minister, revealed last month that the Reserve Bank of India will deploy a digital rupee sometime in the fiscal year 2022-2023.
India will become one of the largest economies to launch a central bank digital currency if the bank follows through on its intentions.
The Indian government, echoing the minister’s statement, told parliament on Tuesday that it has no plans to introduce cryptocurrencies that would be regulated by the RBI.
Officials stressed that India’s CBDC, which the RBI has stated will be launched this year, is “a digital representation of traditional paper currency.”
CBDC To Lift India’s Digital Economy
According to Sitharaman, the establishment of a CBDC will bolster the digital economy significantly. Additionally, he said that digital currency will result in a more efficient and cost-effective currency management system.
“It is therefore proposed to launch the Digital Rupee, which would be issued by the RBI beginning in 2022-23,” he continued.
CBDCs are central bank-issued digital tokens akin to cryptocurrency. They are pegged to the country’s fiat currency’s value.
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The number of countries contemplating the establishment of a CBDC has increased dramatically during the last two years.
Russia and India have already tested pilot CBDCs.
Although the United States currently has no intentions to issue a CBDC, the Federal Reserve has encouraged the public to participate in an open conversation concerning the utility of a CBDC in the country.
Nearly a dozen countries have established a CBDC in its entirety.
Crypto total market cap at $1.78 trillion on the daily chart | Source: TradingView.com
Crypto Unregulated In India
In India, cryptocurrency is still unregulated, according to Pankaj Chaudhary, the country’s Minister of State for Finance.
“The Reserve Bank of India does not issue cryptocurrencies. Traditional paper currency is legal tender issued by the Reserve Bank of India in accordance with the requirements of the RBI Act, 1994,” Chaudhary explained.
The Indian government is actively drafting regulations governing these types of virtual assets. A measure for the asset class was scheduled to be introduced during parliament’s winter session but was not taken up.
Sources said the government is presently consulting widely on how to regulate digital assets and will require additional time because of the issue’s intricacy.
RBI Official Says It’s A Scam
RBI Deputy Governor T Rabi Sankar is not a crypto enthusiast. In fact, he even believes it is a scam.
“Cryptocurrencies are not definable as a money, asset, or commodity; they lack underlying cash flows and inherent value; and they resemble Ponzi schemes,” he said.
Meanwhile, in a statement on the forthcoming launch of the digital rupee, Indian Prime Minister Narendra Modi has some encouraging words to share regarding India’s CBDC.
“The digital rupee will transform the fintech sector by expanding opportunities and easing the burden associated with cash handling, printing, and logistics management.”
Featured image from ORF, chart from TradingView.com