India mulls phased roll out of central bank digital currencies: report

Its launch will require legal changes to the nation’s foreign exchange and IT rules.

The Reserve Bank of India (RBI) is considering a “phased introduction” of a central bank digital currency as it will require legal changes to be made in the nation’s foreign-exchange rules and information technology laws, says Deputy Governor T. Rabi Sankar in a speech outlining the RBI’s plans on 22 July.

Sankar said policymakers were considering running pilot programs for the proposed CBDC. Its introduction will reportedly protect people from the volatility of private virtual currencies, he added.

Also Read: What's up with central banks' craze around digital currencies?

Earlier this year, in its annual report on currency and finance, the RBI said that CBDCs could be designed to promote non-anonymity of monetary transactions and financial inclusion by direct transfers.

Interest-bearing digital fiat can also increase the economy’s response to changes in the policy rate, the report added.

Here’s more from Bloomberg.

Photo courtesy of Anurag Viray