RBI’s upcoming digital currency to be like cash: Report

 RBI's upcoming digital currency is likely to be like cash and will use private blockchain technology. Here is all you need to know:

March 30, 2021 by India Today Web Desk

The Reserve Bank of India’s (RBI) upcoming digital currency is likely to use a private blockchain platform, which will reduce the transaction settlement processes, reported livemint.com. The report also added that the digital currency will be like cash, allowing the central bank to regulate it better.

"RBI-issued digital currency will be exactly like cash and it does not need intermediate settlements and multiple hops," a source was quoted as saying in the report.

Earlier in February, RBI Governor Shaktikanta Das said that the central bank had reservations regarding decentralised cryptocurrencies and is currently working to introduce its own digital currency.

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The central bank governor had said that the indigenous digital currency will be different from other cryptocurrencies but will be technologically at par with them. He said that the central bank does not want to be left behind in the technological revolution and added that the benefits of blockchain technology need to be utilised.

It may be noted that RBI’s private blockchain platform will be like the Unified Payments Interface (UPI) on which government and private companies can build their own apps.

However, only initial discussions regarding this plan have been held and a final decision is awaited. This is because the central bank wants to have complete control over the digital currency, unlike cryptocurrencies that are hard to regulate or monitor.

The report comes at a time when the government is planning to come out with a new cryptocurrency bill, aimed at either banning or regulating decentralised virtual currencies.

While the government had earlier indicated that it wants to completely ban cryptocurrencies/virtual currencies in India, a recent amendment signals that it could introduce measures for better regulation. As part of the amendment, the government has asked companies to disclose cryptocurrency investments and dealings.