The department will promote innovation and aid policy interventions by the central bank while also overseeing the advancement of a digital rupee, according to the Reserve Bank of India.
A basic form of a digital rupee would provide a safe, robust, and convenient alternative to cash in liquidity and scalability, the Reserve Bank of India noted in its report.
India plans to launch its first digital rupee pilot in first quarter of fiscal year 2023, with the slow implementation giving the central bank more assurance.
Paytm believes digital currency offers a lucrative opportunity but is hesitant to get into an industry that has yet to be regulated and was once banned by RBI.
The latest iteration of the bill treats digital currency as a commodity, and the government has also pledged to set up a new committee to look at how digital currency income can be taxed.
The Reserve Bank of India still maintained its stance that digital currencies can lead the country into financial stability, even though it plans on launching its own digital currency.
The project will be the country's first digital currency trial initiative according to the 25th Governor of the Reserve Bank of India, Shaktikanta Das.
Rabi Sankar, deputy governor at the Reserve Bank of India, noted the need for India to keep pace with other major economies in financial innovation, especially with 86% of central banks researching CBDCs.
The Cryptocurrency and Regulation of Official Digital Currency Bill was brought before parliament in early 2021, but the government failed to progress with the bill.
The Reserve Bank of India recently clarified that digital currencies aren’t banned in India, which means that banks must refrain from referring to an outdated memorandum to deny their Bitcoin clients services.
According to sources in India, the apex bank is warning commercial banks against servicing digital currency-related businesses, including exchanges and traders as well.