India should go for a basic version of its central bank digital currency (CBDC) and then upgrade to a more sophisticated version later, the country’s central bank has proposed. The Reserve Bank of India (RBI) stated that this basic CBDC would provide a safe and convenient alternative to cash in its latest report.
RBI proposed going for a basic version of a digital rupee.
The report, titled “Report on Trend and Progress of Banking in India,” looked at the growth in the Indian banking sector in 2021 and its standing in the global financial space. On CBDCs, the central bank proposed a basic version of a digital rupee that it believes will provide a “safe, robust, and convenient alternative to physical cash.” This basic digital rupee would offer benefits to users in terms of acceptance, scalability, liquidity, faster settlement, and ease of transactions with anonymity. India’s central government is soon planning to introduce a crypto bill in the parliament.
RBI has been reportedly working on a digital rupee for some time.
RBI has been reportedly working on a digital rupee for some time now, even as it awaits the passing of a bill that will pave the way for its use by the masses. This bill will be doubled-edged and contains sections that ban the use of decentralized digital currencies like Bitcoin, which it brands as “private cryptocurrencies.” However, as reported earlier, the bill is set to be delayed for months, or more, as the Indian parliament focuses on the budget. The report noted that the Reserve Bank is still working on crucial design elements with the digital rupee, and these include whether the CBDC will be retail or wholesale.