Concerns with private cryptocurrency
Categories: Crypto News
Announcement about introduction of a digital currency comes as the central bank has been studying the safety and effectiveness of a digital rupee. In December, T Rabi Sankar, deputy governor of RBI, said it is planning to introduce two variants of CBDC – a wholesale account-based one and a retail one. “Much progress has already been made on the wholesale account-based one, while the retail CBDC is a little more complicated and will take longer. The RBI has however raised issues with the private cryptocurrency, which also runs on blockchain technology, saying it could create financial instability. Commenting on regulation of cryptocurrencies, Sanjeev Sanyal, Principal Economic Adviser said Monday that the government will take a balanced view on regulation of cryptocurrency. “There are some financial stability issues. But there are also other arguments that are made in terms of innovation and so on….obviously a balanced view on this will be taken.” “The announcement for a Digital Rupee shows the Government of India’s recognition of blockchain technology. While it is not clear what will be the fate of private cryptocurrencies, the RBI-issued Digital Rupee will open a whole new front in currency management. This move is in sync with how other nations, such as China, England, etc. are moving. To be introduced in F22-23, more details are expected on how it will be working,” Amit Agarwal, Partner at Nangia Andersen said.Advanced economies such as the United States and China have also started working on Central Bank Digital Currency (CBDCs) for faster adoption of the digital currency. Bahamas has already issued its CBDC.