RBI Proposes ‘Graded Approach’ To Introduce Cryptocurrency
- RBI has been exploring the pros and cons of the introduction of CBDC.
- The introduction of CBDC has been announced in the Union Budget 2022-23.
- Financial stability and efficient operations of currency and payment systems are been assessed.
New Delhi: The Reserve Bank of India (RBI) said that it was proposing to adopt a graded approach for the launch of central bank digital currency (CBDC), the much-talked-about alternative to cryptocurrency announced by Union finance minister Nirmala Sitharaman while presenting the Budget 2022-23.
In its annual report released earlier in the day, the RBI said it was looking at the pros and cons of introduction of CBDC in India, taking gradual steps through stages of proof of concept, pilots and the launch. It was working to see if the idea can be turned into a reality and function as envisioned.
The proposal aimed to ensure conformity with the objectives of the monetary policy, financial stability and efficient operations of currency and payment systems.“The Reserve Bank is engaged in the introduction of a central bank digital currency (CBDC) in India. The design of CBDC needs to be in conformity with the stated objectives of monetary policy, financial stability and efficient operations of currency and payment systems,” the RBI said in its report.
Introduction of the digital currency was announced in the Union Budget earlier this year with an amendment to the RBI Act, 1934, included in the Finance Bill, 2022. The Finance Bill, 2022 had been enacted, providing a legal framework for the launch of CBDC, the currency regulator said.