The Reserve Bank of India is planning to issue its central bank digital currency (CBDC) in different phases, said deputy governor T. Rabi Shankar.
He further mentioned that the central bank is also being scrutinizing different issues related to CBDC, like the underlying technology and issuance method.
While elaborating the public statement released by RBI, Shankar said, “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.”
He further stated, “As is said, every idea will have to wait for its time. Perhaps the time for CBDCs is nigh.”
The Bank of International Settlements recently, released 2021 survey data, informing that 86 percent of central banks around the world actively researched the potential for CBDCs, 60 percent went a step forward by experimenting with the technology and 14 percent initiated the pilot projects.
As per the reports, China has been leading the market, as it already initiated the trials of digital yuan in various cities of the country. However, the US Federal Reserve and the Bank of England are exploring CBDC to introduce it in the future.
Notably, for quite a long time, the RBI has been researching about CBDCs.
In 2020, when the Supreme Court of India quashed RBI’s ruling over virtual currencies, many Indians started showing their interest in it. Gradually, these digital assets gained popularity in the country. And now, unofficial data specifies that there are around 15 million crypto investors in India with a holding of over $1.34 billion.
The central bank of India has never supported crypto-related activity in the country, therefore, the RBI imposed a blanket ban on cryptocurrencies. However, after SC’s decision, it had to withdraw the ban.
Shankar recently stated, “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.”
Sameer Narang, the chief economist at the Bank of Baroda, has a different opinion on cryptocurrencies. He believes that even if the country gets its own CBDC, the investors would still be inclined towards private digital currencies.
“Some users may want to use the private digital currencies as a store of value and not only for payments,” he added.