India’s central financial institution, The Reserve Bank of India (RBI), is reportedly set to launch India’s first digital currency. The regulatory institution in a surprising turn of events revealed that it is thinking about developing a sovereign digital currency for the Asian nation.
RBI governor Shaktikanta Das said that the issuance of the digital currency was that of a sovereign mandate and would not be handed over to a private company for development. He also reiterated that the central bank was against the issuance of private cryptocurrencies within the country.
It is understood that the development of the digital currency is at the early stage of development with RBI still undergoing meetings with major financial stakeholders in the country. The initial perception is that the process is likely to take a while for it to launch into the Indian market.
RBI Has Been Against The Use Of Crypto Assets In India
RBI has been largely against the use of crypto assets in India with the regulatory body banning all banks within the country from extending services to crypto entities. This is largely due to the fear that digital currencies would enable money laundering within the country.
The ban on digital currencies by RBI has also been a cause of discussion within the crypto community after some move to legislate a total ban of cryptocurrency in the country.
Earlier in the year the Inter-Ministerial Committee (IMC) led by Subhash Chandra Garg, the secretary of Department of Economic Affairs (DEA) had submitted its report on a ban on cryptocurrency in India to the finance ministry.
The report stated that the Indian government should ban all private digital tokens except the one issued by the government. This could have been the precursor for the latest development suggested by the RBI regarding the launch of a sovereign digital currency.
There has been backlash from the crypto community with several startups and exchanges having to close operations in the Asian country. from the looks of things this latest development could be a change in policy from the government towards cryptocurrencies in the long term.
It would be interesting to see how this goes in the coming weeks as more information filters through regarding the digitoken development.