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  1. RBI may save on rupee printing costs by launching ‘central digital currency’

RBI may save on rupee printing costs by launching ‘central digital currency’

Even though RBI (Reserve Bank of India) banned the use of virtual currencies including Bitcoins by the entities falling under its regulation, it’s open to an introduction of fiat digital currencies which will be issued by it.

By: | Published: April 7, 2018 9:39 AM
digital currency in india, is bitcoin legal in india, is digitial coin legal in india, rbi on digital currency, reserve bank of india, business news in hindi RBI holds a very supportive view on blockchain technology. (Image: Reuters)

Even though RBI (Reserve Bank of India) banned the use of virtual currencies including Bitcoins by the entities falling under its regulation, it’s open to an introduction of fiat digital currencies which will be issued by it. An interdepartmental group has been formed in order to study and provide guidance on the ‘desirability and feasibility’ to launch a ‘central bank digital currency’ and will submit its report by June, PTI reported citing central bank. Various central banks all across the world are debating on the likelihood of introducing a fiat digital currency which will be issued by them. They constitute liability of the central bank, and they will be in circulation in addition to the paper currency that we have,” Deputy Governor B P Kanungo told reporters on the sidelines of monetary policy review on Thursday. A central digital currency will help it to cut down on the costs of printing and circulating paper currency, PTI reported citing him.

Although critical about Bitcoin and other cryptocurrencies, RBI holds a very supportive view on blockchain technology.  There is a need to work on blockchain technology and exploit it further, he said. The distributed ledger technology that forms the backbone of all the digital currencies such as Bitcoin holds an immense relevance for the wider economy and there is a need for us to embrace it, he said further. 

“We recognise that blockchain technology or the distributed ledger technology that lies beneath the virtual currencies has a potential benefit for financial inclusion and enhancing the efficiency of the financial system,” he said. In the past too, RBI has issued repeated warnings against making investments in the digital currencies due to their unpredictable nature. Recently, HDFC and Citibank banned the use of their credit or debit cards to make investments in the digital currencies.

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  1. Madhur Malhotra
    Apr 7, 2018 at 2:22 pm
    I don't understand the diabolic nature of RBI. On one hand, you restrict ban all banking ins utions in India to deal with Crypto exchanges citing it promotes fraud, Ponzi, money laundering on the other hand you laud the underlying technology like chain as promising for financial ins utions want to explore further and implement your own digital currency. You scare common people of money laundering while your own banks NPA has risen to Rs. 2,40,000 Crores you don't bat an eyelid nor a single banker's head has rollen till now. Rs. 13,000 CR PNB Scam all top honchos of the bank still get their annual hefty bonuses. Bitcoin is around for 9 years now. There may be hacks and vulnerability, but no scams or frauds in cryptospace. Crypto is decentralized (RBI Banks - heavily centralized) Crypto is de ionary in nature, Your Fiat currency is in ionary) Crypto is transpa , you r opaque, Crypto is peer to peer and you are mediator.RBI Stop fooling with pseudo money
    Reply
    1. Minesh Patel
      Apr 7, 2018 at 10:16 pm
      I agree with you, so let us decenterlise RBI by making it full time regulatory body for banks only, in line with SEBI, let printing of currencies taken over by SBI, and NITI ayog will decide on supply of money and fixing of interest rates. Unfortunately unelected body (RBI) decide most important financial policies of India with out taking any input from GoI or from public. And these financial policies are finalised at head quarters of BIS in Basel Switzerland, our RBI governor is director, and previous governor raghu ram Rajan is vice chairman of BIS, both go every two months to Basel, to formulate financial policies which effect all of us. By the way BIS is central bank of 60 biggest central bank of world including fed, be and ecb. Once RBI is no longer central bank of India, most important financial will be finalised in new Delhi rather than in Basel.
      Reply
    2. Abhishek Kumar
      Apr 7, 2018 at 10:10 am
      RBI has failed to catch big scams like Nirav Modi (13K Crore) and lot many bank scams getting exposed. To move attention from this failure they are taking one more wrong decision after Demonetization. RBI is running away from catching fraudsters by stopping whole market in India. RBI just find one big benefit that they can save printing cost. These RBI top executives still dont know power of chain and unfortunate for India that these guys are taking decisions. They are dictators so not considering interest of crypto investors. Also, RBI is stopping all innovations and generations through crypto market. They are going to miss tax collections from genuine investors. They are losing opportunities by closing doors. If RaghuRam Rajan was here he might have welcomed this market and given supportive framework to catch fraudsters. Lastly, No one can stop crypto market neither US or India. Many investors will invest from outside of India. RBI Kindly request to revisit decision.
      Reply
      1. Baba
        Apr 11, 2018 at 2:41 pm
        Unfortunately all these scandals happened during Mr.Raghuram's period my friend. It doesn't happened overnight, 7 years RBI closed their eyes, Internal auditors, external auditors, took money from the scam an scandlers, Proper auditing was not done, and these auditors knows exactly where is the loop hole, and they squeeze inside the loophole like a rat.
        Reply

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