The cryptocurrency industry in India had been lagging behind when it comes to overall development because of the government’s unclear stance towards crypto. The nation’s central bank had tried to curb crypto use by placing a shadowban on the industry but the Supreme Court lifted the ban 2 years later. Now after another year, the Reserve Bank of India’s (RBI) tune seem to be slightly bullish as the central bank has announced that it is exploring the possibility of a Central bank digital currency (CBDC).
A recent booklet made public by RBI outlines that the central bank is “exploring the possibility as to whether there is a need for a digital version of fiat currency.” The central bank added that it would continue to assess if a CBDC is required and if it found a need, it would start looking at ways to utilize digital currency.
The booklet also asserted that even though cryptocurrencies are growing popular all across the globe, Indian regulators and local regulatory bodies remain “skeptical” of and “apprehensive” about the tech. The bank has also referred to cryptocurrencies as legal tender in the nation, but also called them “a central bank liability in digital form.”
The nation wants Crypto
The situation in India has been quite complicated between the regulators and the cryptocurrencies. As previously reported by The Daily Chain, the Indian Supreme court lifted the blanket ban placed by the RBI on March 2020. Since then, the nation has seen massive growth within the crypto market with an influx of crypto-based service providers setting up shop.
However, several industry experts have also expressed concerns regarding the future of the industry in the nation due to foggy regulations.
It must be noted that if RBI does start developing a CBDC, it would boost cryptocurrency adoption in India. The central bank has noted that there has been “exponential growth of digital payments” in the country with a 12.5% and 43% increase in volume and value, respectively, since 2011.
The bank also added that it plans on targeting “the generation which is most responsive to technology and digital age,” which are those who were born between 1982 and 2004.
India might be too slow when it comes to boarding the CBDC train, but its neighboring country China is close to deploying its state-backed digital currency. Besides adding new features to its CBDC, that nation is also reportedly developing an international platform that supports CBDCs issued by other nations.