Reserve Bank of India (RBI) planning to introduce a digital currency in India. The central bank has established a panel to investigate the viability of a digital rupee, the digital counterpart of India’s currency. The Reserve Bank of India has said that the digital currency will be a legal tender like faith currency and will be supported by the government.
Several other central banks across the world are examining the viability of a central bank digital currency (CBDC) as a more efficient and secure payment system, inspiring the RBI to act. This digital currency will improve money laundering monitoring, financial inclusion, and transaction speed and cost.
The digital currency will be different from decentralized cryptocurrencies like Bitcoin, which function independently of central banks. The RBI will issue and manage the digital rupee, and its value will be pegged to that of the conventional rupee.
The RBI’s statement represents a major step in India’s digital transformation and attempts to create a cashless economy. Indian fintech industry, which has been growing repeatedly in recent years, will be highly benefited by this step of RBI. Yet, implementing a digital currency will necessitate major infrastructure and security investments.
The plan to introduce a digital currency by Reserve bank of India is a forward-thinking initiative that has the potential to overhaul India’s payment system. The digital rupee will offer numerous advantages to both consumers and businesses and will assist India in achieving its aim of becoming a digital-first economy.
