New Delhi: In a piece of good news, the RBI on Friday said the first-ever trials for digital rupee in India may be launched by December 2021. Referred to as central bank digital currencies (CBDC), the digital currency will be a legal tender in the online form and it will also be the online version of the fiat currency that is in circulation.Also Read - Bank Holiday Alert: Banks To Remain Shut For 3 Consecutive Days From Today | Full List Here
Speaking to CNBC, Reserve Bank of India (RBI) Governor Shaktikanta Das said the RBI is being extremely careful about it because it’s completely a new product. Also Read - Good News For Home Buyers: Kotak Mahindra Bank Slashes Home Loan Interest Rates To 6.5% | Here’s How to Apply
“We are being extremely careful about it because it’s completely a new product, not just for RBI, but globally,” Das said. Also Read - RBI Partially Lifts Technology Ban on HDFC Bank, Allows It to Issue New Credit Cards
The RBI Governor also said that the Central Bank is looking into several aspects of this digital currency, including its security, impact on monetary policy and the cash in circulation.
“I think by the end of the year, we should be able to — we would be in a position, perhaps — to start our first trials,” he was quoted as saying.
Das further added that the Reserve Bank of India (RBI) has been working on a phased implementation strategy for the digital currency.
It must be noted that the Central bank digital currencies, or (CBDCs) are digital or virtual currencies which are basically the digital version (in an electronic form) of fiat currencies, for India that would be its domestic currency rupee.
RBI Deputy Governor T. Rabi Sankar had last month stated that that the central bank is working on a phased implementation strategy for a central bank digital currency (CBDC) and examining use cases to ensure that there is little or no disruption.
“They are not commodities or claims on commodities as they have no intrinsic value; some claims that they are akin to gold clearly seem opportunistic,” he said.
Das also added that the RBI is contemplating the choice between using a centralised ledger for the digital currency and having a digital database with access to multiple participants – also known as distributed ledger technology (DLT).