Deputy Governor BP Kanungo of India’s central bank suggested that the institution is already deciding whether to create a digital rupee.
According to a Feb. 5 report by English-language local news outlet Business Standard, Kanungo said today that the Reserve Bank of India (RBI) will announce its decision about central bank digital currency (CBDC) implementation “very soon.”
The institution’s governor, Shaktikanta Das, added that the central bank has been working on CBDCs for a while, noting that “digital currency is work in progress in RBI.”
The announcement comes in the wake of reports last week that prime Minister Narendra Modi’s government plans to pass a “Cryptocurrency and Regulation of Official Digital Currency Bill” that establishes a legal framework for a CBDC while banning private cryptocurrencies—although certain exceptions would be made for utility tokens used by blockchain projects, according to CNBC.
And Cointelegraph reported today that the Central Bank of Nigeria has prohibited banks from servicing cryptocurrency exchanges.
While India’s government has been trying to ban cryptocurrency for several years—courts overturned a de facto ban on banks working with exchanges last year—it has also been seriously looking at a CBDC for some time.
Last August, a former RBI governor suggested that bitcoin, Facebook’s libra stablecoin—since renamed diem—and CBDCs could all co-exist. Raghuram Rajan said permitting all three would prevent either the government or tech giants from controling the “tremendous amount of power” that digital currencies could potentially bring to those who oversee such systems.
As for the current CBDC plans, Kanungo also said today that the committee is studying it, and a digital rupee “is still on the drawing board.”
Kunungo added that an “internal committee is taking a close look to decide on the model of the central bank digital currency,” he said, promising that “you will hear from the Reserve Bank very soon in the matter.”
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