RBI looking to introduce central digital currency
Monday, April 9, 2018 IST
NEW DELHI: The Reserve Bank of India (RBI) on Thursday that it is looking at the possibility of introducing a 'central bank digital currency'. Briefing the media at the end of the two-day meeting of Monetary Policy Committee(MPC) of the RBI, Deputy Governor B P Kanungo said, "While many central banks are still engaged in the debate, an inter-departmental group has been constituted by the Reserve Bank to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency."
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The report will be submitted by end-June 2018, he added.
Explaining its rationale behind the central digital currency, RBI said technological innovations, including virtual currencies, have the potential to improve the efficiency and inclusiveness of the financial system.
The RBI has also directed banks and regulated entities not to deal with or provide services to individuals or businesses dealing in virtual currencies.
"Reserve Bank has repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies. In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time," a statement issued by the RBI stated.
The statement said that a separate circular will be issued in this regard.
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