India will soon launch a pilot digital rupee.
It had been an eternal tragedy between India and the crypto industry, which pretty much dragged on. At the end of last year, there was talk of a real “ systematic risk for the economy ”. This attitude was more than reinforced in February this year by statements by Finance Minister TV Somanathan that “neither Bitcoin and Ethereum nor NFT would ever become legal tender”.
India: No Digital Currencies Except…
A change of heart followed just three months later, as one of the most populous countries in the world gradually shifted from the rhetoric of a complete ban on cryptocurrencies along the lines of China to strictly regulating them. In the meantime, even the ” USA way ” was thrown into the room as a way out for crypto regulation. However, this was probably ruined by a possible mega tax . For the Indian central bank it is still clear: crypto is a “real danger”.
Despite the fact that India is the country with the second-highest number of crypto users, according to a Chainanalysis report, the government wants nothing to do with digital money — at least not with the ones that are already on the market right now. Because: The Indian central bank, which goes by the name ” Reserve Bank of India (RBI) “, wants to start a pilot program for the digital rupee and announce the most important features of the digital central bank currency (CBDC). This emerges from a 50-page report published on Friday (October 7), which was also reported by The Block .
Digital Rupee Pilot Coming «Soon»
A pilot program for the digital rupee will be launched “soon” and information about its features and advantages will be provided “from time to time”, according to the central bank. However, some key features have already been cautiously revealed. The report distinguishes between use cases for private and large customers, for consumers and for bank-to-bank transfers. They also suggest that both could indeed be introduced. Several issuance models are also discussed, notably one where a wholesale CBDC is account-based and issued by the central bank, while the consumer CBDC is token – based and managed by an intermediary.
But that is not the end of the fair. For RBI, “appropriate anonymity for low-value transactions” is of great importance. Thus, one can continue to hold on to a non-interest-bearing coin that resembles physical cash. Consequently, one can understand from this that the technology behind the digital rupee is far from set in stone. However, this also shows the openness of the central bank of India to adjustments. One could therefore speak of a back door that is left open just in case – i.e. in the event of possible developments in decentralized technology. Last but not least, the investigations also focus on the idea of raising awareness of CBDCs. “With compelling reasons,” the report goes on to say, so that a national digital currency becomes “just as attractive as cash, if not more attractive”.