BENGALURU: The Reserve Bank of India (RBI) will adopt a graded approach to introduce the blockchain-based Central Bank Digital Currency (CBDC). It is planning a step-by-step approach - right from proof of concepts to pilots - before launching the digital currency.
The central bank has been exploring the pros and cons of introducing the digital currency in India, ever since it was announced in the Union Budget.
Finance Minister Nirmala Sitharaman, during her Budget speech, said the digital currency would be introduced by 2023. "The digital rupee move will give a big boost to the economy," she had said.
In its annual report, which was released on Friday, the RBI said it is engaged in the introduction of CBDC and its design needs to be in conformity with the slated objectives of monetary policy, financial stability and efficient operations of currency and payment systems.
To introduce CBDC, an appropriate amendment to the RBI Act, 1934 has been included in the Finance Bill, 2022. The Finance Bill, 2022 has been enacted, providing a legal framework for the launch of the digital currency.
Apart from India, many countries have been weighing the pros and cons of CBDCs. In March this year, US President Joe Biden signed an order to examine the option of a US CBDC.
Crypto exchanges in India have been saying that the introduction of CBDC will be helpful in framing regulations.
According to them, going forward, cryptocurrencies could be used in the payment ecosystem and there are many benefits of using digital currencies.