The Reserve Bank of India (RBI), the country's central bank, is considering issuing its own digital currency, according to a booklet on payment systems released by the institution yesterday.
According to the institution, the country needs a digital rupee, and it will study how to make it possible. The RBI has written:
"Private digital currencies (PDCs)/virtual currencies (VCs)/crypto currencies (CCs) have gained popularity in recent years. In India, the regulators and governments have been skeptical about these currencies and are apprehensive about the associated risks. Nevertheless, RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and in case there is, then how to operationalize it."
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It is worth mentioning this is not the first time the country's central bank talks about launching a national digital currency. Thus, in 2018 the institution reported it had set up an interdepartmental group aimed at studying and providing guidance on the "desirability and feasibility" of introducing a central bank digital currency (CBDC) to reduce banknote printing costs and other benefits.
However, in December 2019, the bank governor Shaktikanta Das said it was still too early for the launch of this currency due to technological barriers.
At the same time, the bank's governor has a rather tough stance towards cryptocurrencies, as according to him, the issuance of a currency is a sovereign function.