India’s digital currency to launch in early 2023: Government sources
A top government source said that India is likely to launch its own official digital currency as early as 2023, which will reflect any of the currently available private company-run electronic wallets, but with a change that it is a sovereign. -Supported feature. Finance Minister Nirmala Sitharaman in her budget speech last week had talked about launching a central bank-backed ‘digital rupee’ soon.
A top government source, who did not wish to be identified, said the digital currency issued by the RBI would be counted in units, such that every fiat currency has a unique number.
“The units issued in digital rupees will be included in the currency in circulation. It will not be much different from fiat currency. It will be like an electronic form of fiat currency, so in a sense it will be a government-mandated electronic wallet,” the source said. .
The source said that the RBI has indicated that the digital rupee will be ready by the end of the next financial year. The Digital Rupee blockchain being developed by the Reserve Bank will be able to trace all transactions, unlike the existing system of mobile wallets offered by private companies.
Elaborating further, the source said that using electronic wallets offered by private companies, people currently transfer money to the private company, which holds the money on its behalf and pays a merchant when a transaction takes place.
“Instead of having a note as in the case of digital rupee you would keep a digital currency in your phone and it would be with the central bank and from there it would be transferred to any merchant. It is fully backed by the sovereign,” the source said. said.
If money is transferred to the e-wallet of a private company, the credit risk of that company is also attached to the money in addition to the charges levied by such companies.
“Instead of carrying this wallet, I will be carrying the money over the phone,” the source said.
In the Budget for 2022-23, Finance Minister Nirmala Sitharaman had said that the introduction of Central Bank Digital Currency (CBDC) will give a big boost to the digital economy.
“Digital currency will also lead to a more efficient and affordable currency management system. Hence, it is proposed to introduce a digital rupee using blockchain and other technologies to be issued by the Reserve Bank of India starting from 2022-23,” The minister said. Said.
The exact regulation governing this Central Bank Digital Currency (CBDC) is yet to be finalised. A CBDC is a digital or virtual currency, but it cannot be compared to a private virtual currency or cryptocurrency, which has grown over the past decade. Private virtual currencies do not represent the debts or liabilities of any individual as there is no issuer.
The government has already said that private cryptocurrencies will never be legal tender. The RBI is strongly opposed to private cryptocurrencies as they can have an impact on national security and financial stability.
,