Reserve Bank of India Confirms It Is Looking Into Making a Central Bank Digital Currency
India’s central bank, the Reserve Bank of India’s (RBI), has confirmed the creation of an inter-departmental group tasked with analyzing the feasibility of issuing a rupee-backed central bank digital currency (CBDC), the Economics Times reports August 30.
The group’s establishment and focus was detailed in the bank’s Annual Report 2017-18, confirming earlier details that followed a meeting of India’s Monetary Policy Committee (MPC) in April.
The impetus for investigating the issuance of a fiat-tethered CBDC reportedly derives in largely from cost considerations: the Economic Times cites statistics that suggest the cost of printing paper notes in India was 6.3 billion rupees (about $89 million) for the financial year 2018. RBI’s report noted that:
Source: https://cointelegraph.com/news/reserve-bank-of-india-confirms-it-is-looking-into-making-a-central-bank-digital-currency
This is fascinating news. I spend a lot of time in that country. India has had terrible problems with fiat currency in recent times. Almost two years ago, India demonetized billions of rupees worth of notes. You can only imagine what it is like to see the notes in your wallet rendered worthless in a few hours. Well, not completely worthless. You could go to the bank and redeem them, but oh, the queues. They were massive. It all took ages. I don't get this thing about a rupee backed cryptocurrency though. It sounds to me like the new cryptocurrency would remain tied to fiat in some what. The whole point of crypto is that it's totally different. Wouldn't you agree? India has attempted to go cash-free and there are any amount of digital wallets and debit cards where one can open an account with zero balance. But there are two Indias. There is the huge middle class and upwards, who use gadgets etc. There is also a huge layer of underprivileged poor who work for pennies. What will they do with a digital currency? I suppose like everything else, it is going to take time.
