Considering the Possibility of a Central Bank Digital Currency in India

Earlier this year, the Indian Supreme Court overturned the central bank’s decision to ban cryptocurrency in the country. The Reserve Bank of India (RBI) continues to be averse to accepting crypto-assets and private digital currency. However, there is one idea that seems to be gaining ground in terms of digital money: introducing a central-bank digital currency (CBDC). Last year, the RBI had hinted that it was exploring the issuance of CBDC, which is a cryptocurrency or a digital payment token issued by the central bank of a country and can take either a retail or wholesale form. Wholesale CBDCs can be used by financial institutions holding reserve deposits with the central bank, while private individuals and corporations can use retail CBDCs. The Indian central bank is not alone in considering the possibility of introducing CBDC, as many countries are considering this and a few have even partially implemented such digital currencies. For instance, the French government has launched an experimental programme to test the integration of CBDC to ease inter-bank settlements. Read More
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