Technology
Indian Reserve Bank exploring the possibility of a digital currency
Less than a year after the Indian supreme court overturned the ban on crypto-businesses by the Reserve Bank of India, the position of the bank on digital assets looks slightly more bullish.
The bank is exploring the possibility of whether there is a need for a digital version of fiat currency, according to a payments booklet released today by the RBI. The bank added that if it found a need, it would look into ways to use digital currency.
The RBI booklet acknowledged the worldwide popularity of cryptocurrencies, but claimed that Indian regulators and local government bodies are both "skeptical" of them and "apprehensive."
The bank referred to central bank digital currencies as the country's legal tender, but also referred to them as a digital central bank liability.
The government of India has had a complex relationship with digital currencies. In March 2020, the supreme court of the country effectively overturned a blanket ban on cryptography imposed on crypto companies by the RBI as of April 2018. In response to the supreme court ruling, the number of exchanges has grown, but many in the crypto space have expressed their concerns about the future of the nation's industry.
In India and beyond, such a large bank creating a digital currency could easily promote crypto adoption. The RBI reported a "exponential growth of digital payments" in the country, with a volume and value increase of 12.5 percent and 43 percent, respectively, since 2011. The bank added that it could expand adoption by targeting people born between 1982 and 2004, the generation that is most responsive to technology and the digital age.
