The Reserve Bank of India's Deputy Governor T Rabi Sankar announced in a press conference on Wednesday that the Central Bank Digital Currency (CBDC) will be introduced within this fiscal. However, it is being done so gradually.
Sankar said the same is done to prevent disrupting the financial and banking system.
The Reserve Bank of India (RBI) has announced that they plan to adopt a graded approach for introducing central bank digital currency per the objectives of monetary policy, financial stability, and efficient operations.
"The Reserve Bank proposes to adopt a graded approach to the introduction of CBDC, going step by step through stages of Proof of Concept 12, pilots, and the launch," the RBI said in its annual report for 2021-22.
Last week, Sankar said that CBDCs could 'kill' the reasons for private cryptocurrencies. In response to his claim, some crypto founders and industry experts have rejected it as being too risky or unrealistic, while one founder called his statement "naive."
The RBI has been exploring the benefits and drawbacks of introducing CBDC in India. They are currently examining how best this could be done without disrupting current practices too much or causing confusion among consumers who may not yet understand what "cryptocurrency" means for them as well for everyday users looking forward.
During the Union Budget for 2022-23, Finance Minister Nirmala Sitharaman announced that the introduction of CBDC is a step in the right direction to making our financial system more efficient and cheaper.
According to the US-based think tank Atlantic Council, India may be in the development stage with regards to launching CBDCs, 10 countries have already established their digital currencies while 15 more are currently doing a test run.