Reserve Bank of India In its annual report released on Friday, May 27, it said it was going down a “graded approach”. central bank digital currency, It said the design of the central digital coin should be in line with its objectives of monetary policy, financial stability and efficient operation of currency and payment systems. of RBI The statement comes months after it said it was in a position to begin testing and pilot projects of the CBDC.
“The Reserve Bank A central bank in India is engaged in the introduction of digital currency (CBDC). The design of the CBDC should be in line with the stated objectives of monetary policy, financial stability and efficient operation of currency and payment systems,” stated the Reserve Bank of India 2022 Annual Report on the Functioning of the Bank.
“The Reserve Bank proposes to adopt a gradual approach to the introduction of CBDCs, going through a phase-by-stage proof of concept, pilot and launch,” RBI said in its annual report. A proof of concept is an exercise in which work focuses on determining whether an idea can be turned into reality or to verify whether the idea will act as imagined.
The central bank said that the Reserve Bank is exploring the pros and cons of introducing CBDCs in India. “Accordingly, suitable design elements of CBDCs that can be implemented with little or no interference are being examined,” it said.
“The introduction of CBDC has been announced in the Union Budget 2022-23 and a suitable amendment to the RBI Act, 1934 has been incorporated in the Finance Bill, 2022. The Finance Bill, 2022 has been enacted, providing a legal framework. Is.” Launch of CBDC,” RBI said in its annual report.
A CBDC is legal tender issued by a central bank in a digital form. It is similar to fiat currency and is one-to-one exchangeable with fiat currency. Only its form is different. RBI in its definition of CBDC last year said, “CBDC is a digital or virtual currency, but it cannot be compared with private virtual currencies over the past decade.”
RBI sets up innovation hub
“To promote innovation in a sustainable manner and through an institutional set-up, Reserve Bank Innovation Hub (RBIH) was set up as a wholly owned subsidiary of the Reserve Bank,” it said. RBI Innovation Hub has an independent board consisting of eminent members from industry and academia and is headquartered in Bengaluru.
RBI Hub will collaborate with financial sector institutions, technology, industry and academia and coordinate efforts for exchange of ideas and development of prototypes related to financial innovations to create an eco-system that enables access to financial services and products. will focus on promoting Will advance financial inclusion. It will also develop necessary in-house infrastructure to promote fintech research and facilitate engagement with innovators and start-ups.
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