Looking At ‘Pros And Cons’ Of Introduction Of Digital Currency: RBI

MUMBAI- Reserve Bank on Friday said it is looking at pros and cons of introduction of a virtual currency in the country and it will adopt a graded approach for launching the central bank digital currency.

Finance minister Nirmala Sitharaman while presenting the Budget 2022-23 had announced that the central bank will launch an Indian digital currency.

Introduction of CBDC (Central Bank Digital Currency) was announced in the Union Budget 2022-23 and an appropriate amendment to the RBI Act, 1934 has been included in the Finance Bill, 2022, RBI said in its annual report for 2021-22 released on Friday.

It said that the Finance Bill, 2022 has been enacted, providing a legal framework for the launch of CBDC. “The Reserve Bank is engaged in the introduction of a central bank digital currency 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,” it said in the report.

The Reserve Bank has been looking at the pros and cons of introduction of CBDC in India, it said, adding that it proposes to adopt a graded approach to introduction of CBDC, going step by step through stages of proof of concept, pilots and the launch.

Proof of concept refers to an exercise in which work is focused on determining whether an idea can be turned into a reality, or to verify if the idea will function as envisioned. RBI said that 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”.

Accordingly, the appropriate design elements of CBDCs that could be implemented with little or no disruption are under examination, said the report. After the budget announcement on February 1, RBI Governor Shaktikanta Das had said that the Reserve Bank does not want to rush and is carefully examining all aspects before the introduction of the CBDC.

Follow this link to join our WhatsApp group: Join Now

Be Part of Quality Journalism

Quality journalism takes a lot of time, money and hard work to produce and despite all the hardships we still do it. Our reporters and editors are working overtime in Kashmir and beyond to cover what you care about, break big stories, and expose injustices that can change lives. Today more people are reading Kashmir Observer than ever, but only a handful are paying while advertising revenues are falling fast.



Leave a Reply

Your email address will not be published.