According to deputy governor T. Rabi Shankar, the Reserve Bank of India is exploring a gradual launch of its own central bank digital currency (CBDC) and is looking into different concerns such as the underlying technology and issuance mechanism.
“CBDCs are likely to be in the arsenal of every central bank going forward. Setting this up will require careful calibration and a nuanced approach in implementation,” Shankar said according to a speech released late on Thursday.
“As is said, every idea will have to wait for its time. Perhaps the time for CBDCs is nigh,” he added.
For years, the RBI has been working on the concept of CBDC. In recent years, virtual currencies (VCs) such as bitcoin have grown in popularity in India, with unofficial estimates indicating that the country’s crypto assets are worth over 100 billion rupees ($1.34 billion).
The Reserve Bank of India has expressed its worry over the growth and usage of cryptocurrencies, which it attempted to prohibit in April 2018. The prohibition had to be lifted in March 2020 after the country’s top court ruled that it was illegal.
“CBDCs are desirable not just for the benefits they create in payments systems, but also might be necessary to protect the general public in an environment of volatile private VCs,” Shankar said with regards to the need for CBDCs for emerging economies.
