By December, India Could Start Digital Rupee Trials, Says The Governor Of The Central Bank
- Central Bank Governor Shaktikanta Das told CNBC that the Reserve Bank of India may launch its first digital currency trial programs by December.
- According to Das, the RBI is researching various aspects of digital currency, such as its security, impact on India’s financial sector, and how it would affect monetary policy and currency in circulation.
- Following a decline in cash usage and increased interest in cryptocurrencies such as Bitcoin, central banks have increased their research into digital currencies over the last year.
Governor Shaktikanta Das told CNBC that the Reserve Bank of India may launch its first digital currency trial programs by December.
Central banks in China, Europe, and the United Kingdom are examining the possibility of issuing digital currencies to commercial lenders or the general public.
They’re known as central bank digital currencies, or CBDCs, and they’re essentially the online versions of their respective fiat currencies. That would be the digital rupee in India’s scenario.
In a pre-recorded interview with CNBC’s Tanvir Gill on Thursday, Das said, “We’re being extremely cautious about it because it’s a brand new product, not just for RBI, but globally.”
According to the governor, the RBI is looking into many aspects of a digital currency, including its security, influence on India’s financial industry, and how it would affect monetary policy and cash in circulation.
Das went on to say that the central bank is weighing the pros and cons of using a centralized ledger for digital money against using so-called distributed ledger technology (DLT).
A distributed ledger technology (DLT) is a digital database that allows numerous users to access, share, and record transactions at the same time. The database is owned and administered by a single entity — in this case, A bank — in a centralized ledger.
“I think by the end of the year, we should be able to — we would be in a position, perhaps — to start our first trials,” Das told CNBC.
T Rabi Shankar, his deputy, stated last month that the central bank was working on a “phased implementation approach” for a digital currency.
Growing interest from central banks
Following a drop in cash usage and increased interest in cryptocurrencies such as Bitcoin, central banks have increased their efforts to investigate digital currencies in the last year.
The People’s Bank of China (PBOC) is leading the charge, with real-world testing currently underway in a number of cities. A digital euro and a U.K. CBDC are also being considered by the European Central Bank and the Bank of England, respectively.
CBDCs are distinct from cryptocurrencies in various respects. For starters, they would be fully regulated and controlled by a central authority, most likely the central banks.
Second, rather than being a tradable asset with wildly shifting prices, central bank digital currencies would function more like their fiat equivalents and be widely accepted.
Source: CBNC
The Midas Touch Director Sets a Bitcoin Target of $100,000 or Higher
BuyUcoin Blog | By Anubha Singh
Text source: BuyUcoin Blog
