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clarified that digital currencies aren’t banned in India, which means that banks must refrain from referring to an outdated memorandum to deny their Bitcoin clients services.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.
Reserve Bank of India Governor Shaktikanta Das said the central bank has “major concerns” regarding digital currencies.
Minister Anurag Singh Thakur recently clarified the government’s position on blockchain technology, the development of a digital rupee and the use of digital currencies in India.
India’s digital currency industry faces an uncertain future, with a proposed draft bill threatening to impose a blanket ban on the entire industry.
In a recent outlook on payments in the digital era, the bank justified its earlier apprehension, but revealed that it’s now open to the possibility of a digital rupee.
The instability of the rupee combined with high remittance fees is driving digital currency adoption in India.