New Delhi: Ministry of Finance on Monday informed the Lok Sabha that Reserve Bank Of India (RBI) has sent a proposal to government to include currency in digital form.
Replying to a question regarding the Central Bank Digital Currency or the CBDC, the Finance Ministry said that it has received a proposal from Reserve Bank of India (RBI) in October, 2021 for an amendment to the Reserve Bank of India Act, 1934 to enhance the scope of the definition of 'bank note' to include currency in digital form.
The ministry further said that the introduction of CBDC has the potential to provide significant benefits, such as reduced dependency on cash, higher seignior age due to lower transaction costs, reduced settlement risk.
''Introduction of CBDC would also possibly lead to a more robust, efficient, trusted, regulated and legal tender-based payments option. There are also associated risks which need to be carefully evaluated against the potential benefits,'' it added.
On the first day of winter session, many questions on ban of cryptocurrency and the RBI's plans to introduce an official digital currency were asked to which government replied that RBI has been examining use cases and working out a phased implementation strategy for introduction of CBDC with little or no disruption.
Fearing that cryptocurrency could be misused in future or will spoil youngsters, the government has announced to introduce a bill in the upcoming winter session of parliament which is scheduled to kick off on November 29.
The bill named the cryptocurrency and Regulation of Official Digital Currency Bill, 2021 will most probably prohibit private players in the industry but at the same time there are reports that the government will not ban it completely but it will regulate. How far this information is true can only be cleared in the winter session of the parliament.