Looking at the ‘downside’ of the introduction of digital currency: RBI
Mumbai:
The Reserve Bank of India on Friday said that it is looking into the pros and cons of introducing virtual currency in the country. It will adopt a graded approach to launch the central bank’s digital currency.
Presenting the budget for 2022-23, Finance Minister Nirmala Sitharaman 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 incorporated 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, which provides a legal framework for the launch of CBDCs.
“The Reserve Bank is engaged in the introduction of a central bank digital currency in India. The design of the CBDC should be in line with the stated objectives of monetary policy, financial stability and efficient operation of currency and payment systems,” it said. Report.
The Reserve Bank is looking at the pros and cons of the introduction of CBDCs in India, saying it proposes to adopt a gradual approach to the introduction of CBDCs, step by step through the stages of launch and proof of concept pilots. Its going on.
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 will act as imagined.
The RBI said the design of the CBDC should be in line with “monetary policy, stated objectives of financial stability” and “efficient operation of currency and payment systems”.
Accordingly, suitable design elements of CBDCs that can be implemented with little or no disruption are being examined, the report said.
After the budget announcement on February 1, RBI Governor Shaktikanta Das said that the Reserve Bank does not want to be hasty and carefully examines all aspects before introducing the CBDC.