Not long ago, it was reported that the Reserve Bank of India (RBI) was planning to not only regulate cryptocurrency, but it would also be unveiling a digital version of the rupee, the official currency for the nation. While nothing can be said about the regulation, it has been confirmed by the RBI that there are presently no plans to unleash a digital rupee.
India Will Not Create a Digital Rupee After All
The news was released by Minister of State for Finance Pankaj Chaudhary. He commented:
RBI does not issue cryptocurrency. Traditional paper currency is a legal tender and is issued by RBI in terms of provisions of RBI Act, 1994. A digital version of traditional paper currency is called Central Bank Digital Currency (CBDC).
The nation of India has had one of the most up and down relationships with digital currencies in the world. The country initially put out a statement in the year 2018 that said banks and standard financial institutions could not provide their tools or services to companies that delved in digital currencies or blockchain technology. This law remained in place for about two years until the country’s Supreme Court stated that the law was unconstitutional.
From there, the ruling was reversed, and India was suddenly free to do as it pleased in the digital currency space. Many felt that the nation would wind up becoming one of the biggest crypto havens in the world, and for a while, it looked like India was heading in that direction. However, it wasn’t long before the nation’s parliament stated that it was suddenly looking into a full bitcoin ban.
The news was shocking to traders everywhere, and while nothing was set in stone, Indian regulators were examining the possibility of blocking all crypto activity in the country. Any investors caught holding or trading digital currencies would be faced with prison time and financial penalties.
However, after months of deliberation, India said that it was potentially going to be regulating the crypto space as an entirely new asset arena for investors to enjoy, though no legislation has been introduced to get things underway.
Keeping the Economy Healthy
Chaudhary stated that at the current time, his main concern is the financial well-being of the nation. He commented:
A stable stock market along with a well-functioning and sophisticated market infrastructure is one indicator to assess a country’s financial health. The stock markets are indicative of economic growth in the medium to long term as the stock prices reflect the market’s expectation on future corporate earnings/profitability and hence the underlying confidence in the economy.
Instead of a digital version of the rupee, he stated that the RBI is looking at potential strategies that will allow the nation of India to begin unraveling CBDCs and examining potential use cases that could be “implemented with little to no disruption.”