RBI to Adopt a Graded Approach to the Launch of its Digital Rupee
May 30, 2022 4:57 AM
The Reserve Bank of India (RBI), India's Central Bank has proposed to take a “graded approach” to launching its digital rupee which is the country’s central bank digital currency (CBDC).
RBI on the Proposed Launch of its Digital Rupee
The India's Central Bank also said it is exploring the pros and cons before introducing a digital rupee in India.
On Friday, the Reserve Bank of India published its 2021-2022 annual report. among the topics put up for discussion on the recently released report is the India's central bank digital currency (CBDC).
“The CBDC design needs to be in conformity monetary policy, financial stability and efficient operations of currency and payment systems,” the report states, adding:
The Reserve Bank proposes to embrace a graded approach to introduction of its CBDC, going step by step through stages of proof of concept, pilots and the launch.
Additionally, the report reveals that the central bank “has been exploring the pros and cons of [the] introduction of CBDC in India.”
India’s Finance Minister Nirmala Sitharaman revealed the central bank’s plan to launch a digital currency in February while presenting the 2022-23 union budget.
RBI Deputy Governor T. Rabi Sankar in April, said the central bank would go about launching a CBDC “in a very calibrated, graduated manner, assessing impact all along the line.”
However, the RBI has maintained an anti-crypto stance. According to a recent report published by Coinnewsafrica Governor Shaktikanta Das warned about investing in the crypto market after the collapse of both cryptocurrencies terra (LUNA) and stablecoin terrausd (UST).
In February, the central bank mentioned that cryptocurrency poses a big threat to India’s financial stability. The bank’s deputy governor also advised that banning cryptocurrency in India is “most advisable” and that regulation would be almost impossible to achieve.”
Meanwhile, the government of India has not decided on the country’s crypto policy just yet but there have been a 30% tax on crypto income currently. Also, a 1% tax deducted at source (TDS) will soon go into effect in India.