India’s Central Bank working towards implemention of digital currency

Karthik Subramanian

The Deputy Governor of the Reserve Bank of India, T Rabi Sankar, has said that the central bank was working towards a phased implementation of a central bank digital currency and is in the process of introducing it for wholesale and retail segments shortly.

Alpari exits Indian market, takes a look at a possible IPO

This is the first and strongest signal yet from the central bank on the launch of a digital currency and he added that the time was ripe for the same and that many other central banks were also working towards the goal.

“Like other central banks, RBI has also been exploring the pros and cons of the introduction of CBDC for quite some time,” he said. “Conducting pilots in wholesale and retail segments may be a possibility in the near future. So, some progress has been made. You know we could likely come up with this in the near future,” he added.

The bank felt that the CBDCs were needed to protect the users from other cryptos which were highly volatile and posed a huge risk to the users and also to the financial system. So, it was looking into areas where digital currencies can be introduced with little to no impact on the financial and monetary system as such.

He also added that changes were needed to the monetary laws as they were written with physical cash in mind at that time and hence had to be changed to handle the legal aspects of digital currencies. Some of the key issues being looked at by the bank include the risk of flight of funds whenever a bank is under stress. Other key aspects include the scope of CBDCs, the type of technology that needs to be used, and the validation mechanism as well.

India joins the long list of over 60 countries that are busy with launching their own digital currencies and this list includes the Eurozone, Switzerland, France, Israel, etc. It is still not clear which of these banks are using their own customised technology or whether they are opting for Ripple (XRP) or Ethereum. But the rise of digital currencies could mean that the likes of Bitcoin and other cryptos could be at risk. Already, their volatility is a put-off for many users who want to use them as a payment mechanism, and hence we are seeing that a lot of users , who want to use cryptos for payments, are moving towards stablecoins. This is going to reduce the other cryptos to purely speculative instruments with no real-world value for them, in the long run, except for the fact that they provided a nice melting pot for others to realise the utility of digital currencies.

 

 

Read this next

Retail FX

Texas Slaps Forex Scam with Cease and Desist Order

The Texas State Securities Board (TSSB) is following through on its promise to crack down on online trading fraud.

Industry News

JPMorgan Chase to open its UK neobank next week

JPMorgan Chase, the biggest US bank by total assets, will next week launch its City’s digital-only bank, which offers a range of savings and loan products under its ‘Chase’ brand in the UK.

Retail FX

TIOMarkets UK reports $78,461 in 2020 revenues

TIOmarkets’ FCA-regulated entity reported its financial results for the year ending December 31, 2020. The company posted a revenue figure that was nine times the amount it reported in the fiscal year of 2019.

Technology

Equiduct deploys big xyt’s data analytics for equity market structure

“Banks, asset managers, exchanges and market participants across the globe consistently rely on big xyt as an independent reference for equity market structure”.

Retail FX

BDSwiss partners with PayRetailers to address payment landscape in LATAM

PayRetailers’ suite of payment options via single seamless API integration will be available for BDS Markets Ltd. only.

Digital Assets

Coinbase applies for NFA license while awaiting SEC lawsuit

A license from the National Futures Association (NFA) would open the door to cryptocurrency derivatives trading.

Industry News

Euroclear acquires MFEX to enhance offering for fund distributors and fund managers

This transaction brings together two highly complementary businesses.

Industry News

Madoff Victim Fund sends $568 million to 31,000 victims of Ponzi scheme

Bernard L. Madoff used his position as chairman of BLMIS to steal billions from his clients.

Digital Assets

Revolut uses Bitcoin to Pay for its office space

Revolut, the company that is looking to build a financial super app, has used bitcoin to pay for its largest office space in Dallas, Texas to the flexible workspace provider WeWork.

<