The Reserve Bank of India is preparing to launch a digital rupee.
According to a Feb. 24 Bloomberg report, the central bank’s governor Shaktikanta Das said that the institution is “very much in the game” in getting ready to launch a central bank digital currency (CBDC).
Das said that there is still no set date for the launch of the digital rupee, but highlighted that the project is “receiving our full attention” and that the central bank is already tying up loose ends by working on the technology and the procedural aspects of the system.
The decision must be recent, considering that earlier this month the institution’s deputy governor BP Kanungo of India’s said that the bank was very near reaching a decision on CBDC implementation.
It joins China, which is far along in its long-planned creation of a digital rupee.
Das also said during today’s interview that India’s monetary authority has “major concerns” over cryptocurrencies and their potential impact on the country’s financial stability. The country’s government has been trying to ban crypto assets for many years. Previously, local banks were banned by a regulator from working with cryptocurrency exchanges, but the measure was later overturned by courts.
Surprisingly enough, in the summer of 2020, a former Reserve Bank of India governor suggested that competition between private and public initiatives is crucial to prevent one asset from becoming too powerful. He has gone as far as saying that Facebook’s Libra stablecoin—since renamed Diem—and CBDCs could all co-exist.
This hostile climate does not prevent brave players from the cryptocurrency industry from trying to take a stronghold in India. On the last days of last year, cryptocurrency-focused bank Cashaa opened a branch branded Unicas in India claiming it to be the “world’s first physical crypto banking branch.”
In early December, Indian crypto firm Unocoin announced plans to launch an institutional crypto asset trading platform. This decision was built around the confidence of the firm’s CEO and co-founder Sathvik Viswanath, who told Modern Consensus during an interview held at the time that the situation for the Indian crypto industry was not as grim as many believed it to be:
“Given the growth in the number of [crypto] investors, job and innovation opportunities, it is very likely that the government… will eventually change the prospect of crypto in India.”
That doesn’t appear to be the case, as the government is moving ahead with legislation that would ban cryptocurrencies outright.