Further strengthening India’s decision to introduce an in-house central bank digital currency (CBDC) in 2022-23, the Reserve Bank of India (RBI) has decided to roll out a CBDC “with little or no disruption” in three Proposed one-stage graded approach. traditional financial system.
In February, while discussing the Budget for 2022, Indian Finance Minister Nirmala Sitharaman spoke of launching a digital rupee to provide a “big boost” to the digital economy. In the annual report released by India’s central bank on Friday, the RBI revealed an exploration of the pros and cons of introducing a CBDC.
In the report, RBI stressed the need for India’s CBDC to be in line with India’s objectives relating to “monetary policy, financial stability and efficient operation of currency and payment systems”.
Based on this requirement, RBI is currently examining various design elements of a CBDC that can coexist within the existing fiat system without any disruption. The Indian Finance Bill 2022, which implemented the introduction of a 30% crypto tax on unrealized gains, also provides a legal framework for the launch of the digital rupee:
“The Reserve Bank proposes to adopt a gradual approach to the introduction of CBDCs, step by step through the stages of Proof of Concept, Pilot and Launch.”
At the concept stage, halfway through 2022, the RBI is in the process of verifying the feasibility and functionality of launching a CBDC.
related: RBI warns of crypto ‘dollarisation’ of Indian economy
Earlier this month, on May 17, RBI officials reportedly warned against crypto adoption, citing the risks of “dollarisation” of the Indian economy.
As Cointelegraph reported based on the Economic Times findings, key RBI officials, including Governor Shaktikanta Das, raised concerns about the US dollar-dominated world of cryptocurrencies. An unnamed official said:
“Almost all cryptocurrencies are dollar-denominated and issued by foreign private entities, this could ultimately lead to dollarization of a part of our economy that would be against the sovereign interest of the country.”
“This [crypto] This would seriously undermine the ability of the RBI to set monetary policy and regulate the country’s monetary system,” he said.