Indian Government Says Central Bank Does not Plan to Issue Crypto

The Indian government has informed the parliament that they have no plans of issuing a cryptocurrency that will be regulated by the Reserve Bank of India (RBI). The government went on to clarify that the central bank digital currency (CBDC) that will be launched in the country in this financial year by the central bank would just be a digital version of the traditional paper currency that is used in India. Some questions were answered by the Indian ministry of finance on Tuesday regarding ‘RBI Cryptocurrency’ in the country’s upper house of parliament, Rajya Sabha.

Sanjay Singh, a member of the Rajya Sabha, asked the finance minister to confirm if it was true that the Indian government is planning on launching a cryptocurrency that would be regulated by the RBI. The ministry of finance’s minister of state, Pankaj Chaudhary gave a negative response. Singh went on to ask if the government was aware that crypto is meant to be unregulated and free from any intervention from the government. Minister Chaudhary confirmed that cryptocurrencies are currently not regulated in the country. By all accounts, the Indian government is working on developing regulation for cryptocurrencies. A crypto bill had been listed in the winter session of the parliament for introduction, but it hadn’t been taken up.

Reports indicate that the government is still working on crypto assets regulation and consulting on it because and the complex nature of the issue means that it will need more time. Singh’s questions did not end and he also had questions about the digital rupee for the finance minister. It is known that the Indian central bank is working on developing a digital rupee and is planning on issuing it in this year. Singh asked about the difference between the traditional paper currency and the RBI cryptocurrency.

In response, Chaudhary said that the RBI is not going to issue a crypto. He said that the paper currency is issued by the RBI as legal tender in accordance with the RBI Act, 1994. The digital version of this currency is currently under development and is termed as the central bank digital currency (CBDC). During her budget speech on February 1st, Sitharaman, the Indian Finance Minister, had said that the digital economy would get a strong boost from the introduction of the central bank digital currency. The finance minister said that they would be able to create a cheaper and more efficient currency management system with digital currency.

Narendra Modi, the Indian Prime Minister, also talked about the upcoming launch of the digital rupee. He said that this introduction would help in revolutionizing the fintech sector because it would create new opportunities and also reduce the burden which is associated with printing and handling of cash, along with logistics management. The Reserve Bank of India (RBI) is working on the CBDC and believes it will be enough for the country. It has previously shared concerns about cryptocurrencies and proposed banning them altogether in the country, which has not been well-received by the Indian crypto community.