The Reserve Bank of India (RBI), the central bank of India, is exploring the possibility of using central bank digital currency(CBDC) payments.
According to a payment document issued by the Reserve Bank of India on Monday, the bank is currently "exploring the possibility of requiring a digital version of fiat currency." The bank added that if it finds a need, it will study how to put the digital currency into use.
The bank acknowledged that cryptocurrencies are becoming popular globally, but Indian regulators and local government agencies are both "skeptical" and "full of concerns" about cryptocurrencies. The Central Bank of India refers to the central bank digital currency as the country's legal tender, and also calls it "digital central bank liabilities."
The relationship between the Indian government and digital currency has always been complicated. According to a previous report, in March last year, the Supreme Court of India overturned the comprehensive ban on crypto businesses imposed by the Central Bank of India since April 2018. The number of crypto exchanges has increased due to the Supreme Court’s ruling, but many people in the crypto sector have expressed concerns about the future of the industry in the country.
If the Reserve Bank of India launches digital currency, it will easily further promote the application of crypto technology in India and other regions. The Central Bank of India stated in the report that the country's "digital payments have grown exponentially", since 2011, in terms of volume and value, they have increased by 12.5% and 43%, respectively. The bank added that it may promote it by targeting "the generation most responsive to technology and the digital age" (people born between 1982 and 2004).