MUMBAI: The Reserve Bank of India (RBI) proposes to adopt a graded approach for the introduction of digital currency in the country, according to the RBI’s annual report for FY 2021-22.
The Reserve Bank is engaged in the introduction of a central bank digital currency (CBDC) 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, the report noted.
“The Reserve Bank proposes to adopt a graded approach to the introduction of CBDC, going step by step through stages of Proof of Concept, pilots and the launch,” the report said.
Reacting on the report, BJD National Spokesperson and Rajya Sabha MP Amar Patnaik said, the government should adopt the graded approach even in the case of private crypto space.
“With regard to a graded approach, I said exactly this about six months ago. @RBI should have activated its regulatory sandbox at least two years ago & worked on this instead of espousing a ban. Even in the private #crypto space, Govt should follow this approach,” Patnaik said in a tweet.
In the annual report, the RBI said it has been exploring the pros and cons of the introduction of CBDC 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. Accordingly, the appropriate design elements of CBDCs that could be implemented with little or no disruption are under examination.
The introduction of CBDC 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. The Finance Bill, 2022 has been enacted, providing a legal framework for the launch of CBDC.