RBI to launch India's Digital Currency soon, 'A completely new product' says RBI Governor

The Reserve bank of India (RBI) is all set for the phased introduction of a central bank digital currency (CBDC) by the end of this year. The launch of the CBDC would be the pioneer of digital currency in the country. The CBDC would be something that supports the banking system or compliments the existing frameworks in place.

In an interview with CNBC, RBI Governor Shaktikanta Das said, "the Reserve Bank of India might launch its first digital currency trail programmes by December. This could indicate that this is just the first of various kinds of digital currencies that might hit the market further down the road. We are being extremely careful about it because it’s completely a new product, not just for RBI, but globally."

Central Bank Digital Currency

The central bank digital currency is a digital or virtual currency that is issued by the central bank in the form of a tender. It works like existing digital/fiat currency. It is a legally recognized currency with an existing financial body backing its function. It is like having your money in a digitized version whose value remains the same. 

The RBI stated, "the central bank digital currency and the interest it held as an asset were universal, but very few countries have even come close to the pilot stage of launching such an endeavour. One of the reasons behind this move towards the digital is that the RBI has an ever-decreasing usage for the traditional paper currency. Add to that the fact that we live in an age of attempted sustainability and the digital medium starts to become the only feasible long-term solution."