RBI will introduce Digital Currency soon, Know details

The Reserve Bank of India is planning to consider a “phased introduction" of a central bank digital currency as it will need legal changes to be made in the nation’s foreign-exchange rules and information-technology laws, Deputy Governor T. Rabi Sankar said.

“Central banks have increased their attention on digital currencies," in recent years, Sankar said.

Recently, the European Central Bank has taken a major step toward a digital euro approving an “investigation phase" that could ultimately lead to a virtual currency being implemented. As stated by ECB, "the next stage will last 24 months and aims to address key issues on design and distribution." Earlier, in the annual Report on Currency and Finance, the RBI said "central bank-backed digital currencies could be designed to promote non-anonymity of monetary transactions and financial inclusion by direct transfers." 

The plan of RBI

RBI is planning to introduce digital currency in the wholesale and retail sectors on a "phased introduction" basis. The Deputy Governor of the Reserve Bank said, "there is a need to protect people from the effects of volatility in digital currency without government guarantee." Referring to an unauthorized digital currency like bitcoin, he said, "the central banks of many countries of the world are working towards starting it." 

What is Digital Currency?

In general, digital currency is being issued by the central bank of a country. It gets the identity of the government of the country. It is also included in the balance sheet of the central bank of that country. Digital currency can be converted into the sovereign currency of the country like rupee in India.