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Reserve Bank of India is exploring the potential of digital currency

Reserve Bank of India is exploring the potential of digital currency

On Monday, Reserve Bank of India announced that it is open to exploring the potential of a digital version of the Indian rupee. The decision comes amidst the increasing fame of virtual currencies in several parts of the world. As per the booklet on payments released, RBI plans to explore digital currency. In India, the regulators and governments have been suspicious regarding these currencies. They are anxious about the associated dangers.

However, the RBI booklet recognized the demand for encircling cryptocurrencies globally but insisted that Indian regulators and local government bodies are skeptical and apprehensive about them. The bank attributed CBDCs as authorized tender in the nation and named them a central bank liability in digital form. The Government of India has had a ambiguous relationship with digital currencies. In March 2020, the country’s Supreme Court finally reversed a blanket ban on crypto that the RBI had inflicted on crypto businesses effective from April 2018.

Development in the number of Crypto Exchanges in India after lifting RBI Crypto Ban

Moreover, after overturning the ban, the number of exchanges has increased. However, many people in the crypto space have displayed concerns over the country’s future crypto industry. Further, such a large bank producing a digital currency could also develop crypto adoption in India and beyond. The RBI further stated that there had been an exponential growth of digital payments” in the country. It noted a 12.5% and 43% rise in volume and value, respectively, since 2011. The bank replied that it might extend adoption by aiming towards the most responsive generation to technology and digital age, born between 1982 and 2004.

Nevertheless, RBI Governor Shaktikanta Das has been opposing private cryptocurrencies, repeating that the sovereign can be the only currency issuer. In December 2019, Das stated it is too quick to speak about a CBDC due to technological obstacles. However, the RBI is reviewing this concept. The regulator’s most advanced statement will load up discussions in the financial system encompassing cryptocurrency’s role in an economy. It puts virtual currencies against fiat currencies supported by government guarantees.

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