The Reserve Bank of India (RBI), the country's central bank, is looking into the need to launch its digital currency (CBDC).
In a brochure on payments systems published on Monday, January 25, RBI said it is going to explore launch options if the need for the digital rupee arises.
“Private digital currencies (PDC) / virtual currencies (VC) / cryptocurrencies (CC) have become popular in recent years. In India, regulators and governments are skeptical about these currencies and are wary of the risks involved. However, RBI is studying whether there is a need for a digital version of fiat currency and, if there is one, how to bring it into circulation,” the central bank wrote.
Back in 2018, the Central Bank formed an interdepartmental group to study and provide recommendations on the "desirability and feasibility" of introducing CBDC to reduce the cost of printing banknotes and other advantages of digital currencies.
In December 2019, RBI head Shaktikanta Das said it was too early to talk about CBDC due to technology limitations. “Technologies have yet to be given adequate guarantees in this area. I think that the Reserve Bank will consider this issue at the appropriate time,” he said.
At the time, Das also commented on cryptocurrencies. He stated that the RBI is "clearly against" cryptocurrencies since currency issuance is a function of the Central Bank.
Overall, the RBI is not opposed to the idea of a central bank digital currency, but it is in no rush to issue it either. Meanwhile, neighboring China, after six years of development, is approaching the launch of the digital yuan.