- India will launch its CBDC in 2022-23.
- RBI stated that the CBDC would align with existing monetary policies.
- India’s stance on crypto is still unstable.
The Reserve Bank of India released an annual report where it spoke about India’s Central Bank Digital Currency (CBDC). The report stated that the country’s CBDC, along with the monetary policies and payment systems, will be aligned together.
To support the country’s financial structure, the Reserve Bank of India (RBI) will be taking a graded approach. The release of the report is followed by the announcement of a senior RBI official who stated that RBI would provide the wholesale and retail sectors with separate CBDCs.
RBI noted in the report that:
The Reserve Bank proposes to adopt a graded approach to the introduction of CBDC, going step by step through stages of Proof of Concept, pilots, and the launch. The design of CBDC needs to be in conformity with the stated objectives of monetary policy, financial stability, and efficient operations of currency and payment systems.
India has never been at the forefront of cryptocurrencies and blockchain technology. The country has always shown reluctance to legalize cryptocurrency, as the bill to ban crypto had been submitted many times. India recently stepped in to introduce a hefty 30% tax on every crypto gain.
Indian investors didn’t welcome the proposal as it was considered to demotivate the entire crypto sector. To add to that, the country is also set to introduce a 1% TDS tax on crypto transactions from next month. The country’s plan to introduce a CBDC is mainly based on the factor that CBDCs will be controlled and regulated by the government.
Several countries like the UK, Russia, China, Nigeria, etc., are also working on building their CBDCs. When global nations take a reasonably motivating approach towards cryptocurrency, Indian investors also hope for the same.