Fortifying India’s decision to introduce an in-house CBDC, the Reserve Bank of India proposed a three-step graded approach for rolling out CBDC with little or no disruption to the traditional financial system.
While discussing the budget for 2022 in February, Nirmala Sitharaman the finance minister of India spoke about the launch of a digital rupee to offer a boost to the digital economy. In the annual report released on Friday by India’s central bank, RBI revealed exploring the pros and cons of introducing a CBDC.
In the report, RBI stressed the need for India’s CBDC to conform to India’s objectives related to “monetary policy, financial stability and efficient operations of currency and payment systems.”
Based on this need, RBI is currently examining the various design elements of a CBDC that can co-exist within the existing fiat system without causing disruptions. The Indian Finance Bill 2022, which enforced the introduction of a 30% crypto tax on unrealized gains, also provides a legal framework for the launch of a digital rupee.
Halfway through 2022, at the proof-of-concept stage, RBI is in the process of verifying the feasibility and functionality of launching a CBDC.
