MUMBAI: The Reserve Bank of India is likely to launch digital currency by December. Hinting about this, RBI governor Shaktikanta Das said on Friday that the bank might come up with the launching of a pilot of its digital currency by the last month of this year. The bank, however, has not yet decided whether to go for distributed ledger technology or centralized ledger if it goes ahead with the plan of launching its digital currency.
Cryptocurrencies are based on distributed ledger technology. It enables the currencies to be held and traded sans any central authority. Shaktikanta Das' statement on Friday indicates that the RBI is mulling to have a central bank digital currency (CBIC). Das told a news channel that they are very careful about the matter as it is a totally new product for the entire world.
He said the bank (RBI) is thoroughly going through various aspects of digital currency, like its security, its impact on the nation's financial scenario, and its probable effect on monetary policy and others.
RBI deputy governor T. Rabi Sankar, at a news conference on monetary policy earlier this month, had said the RBI would develop a mode for operations of fiat digital currency by the end of this year. A few days before the monetary policy, Sankar said every central bank across the globe is likely to launch a digital currency and that the time for doing the same for them is the present time.
The plan by RBI, which regulates the banking system in the country, of launching a digital currency comes when it has concerns rising over the growing popularity of cryptocurrencies. The Supreme Court has revoked a ban that provides services to companies dealing in cryptos, banks often hesitate to provide support to such businesses considering their regulator's lack of comfort.