Governor of the Reserve Bank of India (RBI) Shaktikanta Das said the central bank plans to start testing the digital rupee by the end of 2021.
In an interview with CNBC, Shaktikanta Das said that when exploring the possibilities of the state digital currency, the central bank was “extremely cautious”, despite the fact that central banks around the world have long begun to conduct similar studies.
RBI is now studying not only the potential impact of the digital rupee on India’s financial sector, its monetary policy and user safety, but also technical issues. The Central Bank of India is weighing the benefits of using a government stablecoin based on a managed and decentralized blockchain.
“I think by the end of the year we will be able to start the first tests of the digital currency of the Central Bank. This is a completely new product not only for RBI, but for the whole world, ”Das said.
Until recently, RBI believed that the digital rupee could undermine the role of commercial banks. However, now the central bank is leaning towards a phased implementation of its project, since the digital rupee can become a “counterweight” to private cryptocurrencies and stablecoins. Earlier, the media repeatedly reported that the Central Bank of India may completely ban cryptocurrencies in the country, and Indian citizens will not be able to trade on foreign cryptocurrency platforms.
India is not the only Asian country exploring the possibility of issuing its own digital currency. The central banks of Japan and South Korea are also planning to test government cryptocurrencies this year.
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