RBI may launch e-currency by December

MUMBAI: Federal Reserve Bank of India governor Shaktikanta Das reiterated on Friday that the financial institution may launch a pilot of its digital currency by December 2021. However, the RBI is yet to finalise whether to launch the currency using distributed ledger technology (DLT) or a centralised ledger.
DLT is that the platform on which cryptocurrencies are based, enabling them to be held and traded with none central authority. The statement by Das indicates that the RBI is on target with its plans for a financial institution digital currency (CBIC). “We are being extremely careful about it because it’s completely a replacement product, not only for the RBI, but globally,” Das told a channel . He said that the RBI is studying various aspects of digital currency, including its security, impact on India’s financial sector also as how it might affect monetary policy and currency in circulation.
In the interview, Das said that the monetary policy could jibe if there was a symbol of durable recovery. He said that while currently there’s a niche in capacity utilisation in India and there’s slack within the economy, he didn’t see any sign of stagflation.

During the monetary policy news conference on Transfiguration , RBI deputy governor T Rabi Sankar had said that the financial institution would begin with a mode for operations of fiat digital currency by the top of the year. A fortnight before the monetary policy, Sankar had said that each financial institution within the world was likely to launch a digital currency and said the time for them is now.

RBI’s launch of a digital currency comes when it’s mounting concerns over the rising popularity of cryptocurrencies. Although the Supreme Court has lifted a ban on banks providing services to companies dealing in cryptocurrencies, banks are reluctant to support such businesses given their regulator’s discomfort.