RBI to adopt graded approach to introduce digital currency

The Reserve Bank of India (RBI) on Friday said that it is proposing to adopt a graded approach to the introduction of Central Bank Digital Currency (CBDC) in conformity with the objectives of monetary policy, financial stability and efficient operations of currency and payment systems.

“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.

The RBI said that it has been exploring the pros and cons of the introduction of CBDC in India and the appropriate design elements of CBDCs that could be implemented with little, or no disruption are under examination.

“The Reserve Bank is engaged in the introduction of a central bank digital currency (CBDC) in India. The design of CBDC needs to be in conformity with the stated objectives of monetary policy, financial stability and efficient operations of currency and payment systems,” it said.

The RBI further said that the design of CBDC needs to be in conformity with the stated objectives of monetary policy, financial stability and efficient operations of currency and payment systems.

“The introduction of CBDC has been announced in the Union Budget 2022-23 and an appropriate amendment to the RBI Act, 1934 has been included in the Finance Bill, 2022. The Finance Bill, 2022 has been enacted, providing a legal framework for the launch of CBDC,” the central bank said in a statement.

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