RBI Considering Digital Currency Launch !!!

The Reserve Bank of India (RBI) is mulling on launching its own digital currency in the near future as the Central Bank is currently working towards a phased implementation strategy and examining cases that could be implemented with little or no disruption in the banking system and the monetary policy.

RBI Deputy Governor T Rabi Sankar said RBI is working on a phased implementation strategy for its own digital currency and is in the process of launching it in wholesale and retail segments in the near future.conducting pilots in wholesale and retail segments may be a possibility in the near future. So, some progress has been made. You know we could likely come up with this in the near future," Sankar said.

This assumes significance for Indian markets as cryptocurrencies continue to gain popularity across the world while several countries and economies show reluctance to accept the decentralised system of blockchain technology on which the cryptocurrencies work. Although blockchain technology is touted to be the currency of the future by several observers and experts, the volatility and risk involved in investment in cryptocurrencies is something the central authorities across the world cannot ignore. The RBI Deputy Governor said CBDCs are needed to protect the consumers from the volatility of virtual currencies which have seen drastic fluctuations in their value.

"Developing our own CBDC could provide the public with uses that any private virtual currency can provide and to that extent might retain the public preference for the rupee. It could also protect the public from the abnormal level of volatility some of these virtual currencies experience," he said.

In India, a high-level inter-ministerial committee constituted by the Ministry of Finance has examined the policy and legal framework and has recommended the introduction of CBDC as a digital form of fiat money in the country.

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