The report issued by the Reserve Bank of India details that they all agree with launching a CBDC, as long as it contemplates functions and gets inserted in the payment systems managed in the country.
The Reserve Bank of India (RBI), the first institution that governs the monetary and financial guidelines of the country, proposes that before implementing a sophisticated digital currency backed by the entity (CBDC), it is the first option to test with a that has a more basic feature.
The position of the RBI got reflected in its report presented today entitled Trend and progress of banking in India 2020 – 21. The entity shared its considerations on a CBDC, showing an open stance about the idea, even though historically it has been against more traditional digital currencies.
In this sense, the RBI advocated a first basic implementation, which could get comprehensively tested to have a minimal impact on monetary policies and on the banking system that governs the country. Therefore, the idea is to create a space within the already consolidated backbone in terms of payments for this type of asset to fit perfectly and be more beneficial for residents and financial institutions.
Two Types of CBDC for India
The most striking aspect of the report is that the RBI would propose the creation of at least two CBDCs with different properties, which could get intended for c times.
RBI Deputy Director Rabi Shankar highlighted that one of them would be a CBDC for wholesale use (CBDC-W), which intends to reach one audience and another of a retail type (CBDC-R) designed for residents.
Concerning the latter, the director pointed out that the CBDC designed at the retail level could be a more complicated situation because it addresses extra considerations and needs better thinking about some dynamics.
In any case, Shankar made it clear that neither of the two is ready for now, so once they get finished, they will be launched in the testing phase to evaluate the receptivity and the corresponding use.
This announcement comes amid tensions in India regarding the use and commercialization of cryptocurrencies. There is currently a bill in progress to regulate these assets, although this has not been made public, and the considerations outlined there are unknown.
Crypto Must Get Blocked
Among the opponents against cryptocurrencies, the most recent is the Minister of State for Foreign Affairs, Meenakshi Lekni. He has said that cryptocurrencies should get blocked if used for illegal purposes, such as launching cyberattacks in India, launching other attacks against India, carrying out different types of shady work such as drug trafficking.
This position appeared to the public right after the Indian government agreed to add new changes to the crypto bill. The ministry added that he is pretty sure that the Ministry of Finance and the Ministry of Information Technology would have thoroughly examined these aspects.
By: Jenson Nuñez
