Considering the ‘pros and cons’ of introducing a digital currency: RBI
Mumbai:
The Reserve Bank of India on Friday said it was looking into the pros and cons of introducing a virtual currency in the country. It will adopt a categorical approach to launching a central bank digital currency.
Finance Minister Nirmala Sitharaman when presenting Budget 2022-23, announced that the central bank will launch an Indian digital currency.
The introduction of CBDC (Central Bank Digital Currency) was announced in the Union Budget 2022-23. An appropriate amendment to the RBI Act, 1934 has been included in the Finance Bill, 2022, the RBI said in its annual report for 2021-22 released on Friday.
The Finance Bill 2022 has been enacted, providing a regulatory framework for the introduction of CBDCs.
“The Reserve Bank is engaged in the introduction of a central bank digital currency in India. The design of the CBDC needs to be aligned with the stated goals of monetary policy, financial stability and financial stability. and the efficient functioning of the monetary and payment systems,” it said in the report.
The Reserve Bank looked at the pros and cons of introducing CBDCs in India, adding that it proposes to adopt a decentralized approach to introduce CBDCs, step-by-step through proof-of-concept phases. concept testing and launch.
A proof of concept refers to an exercise in which work focuses on determining whether an idea can be turned into reality or verifying whether the idea works as envisioned.
The RBI said the design of the CBDC needed to be consistent with the “stated objectives of monetary policy, financial stability” and the “effective functioning of the monetary and payment systems”.
Accordingly, proper design elements of CBDCs that can be implemented with little or no disruption are being examined, the report said.
After announcing the budget on February 1, RBI Governor Shaktikanta Das said that the Reserve Bank does not want to rush and carefully consider all aspects before introducing the CBDC.
