CBDC Will Be Introduced This Year, 'Process Of Introduction Will Be Gradual': RBI Deputy Governor T Rabi Sankar

CBDC is a virtual form of a fiat currency.

India will introduce a CBDC this year.

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India will indeed be going ahead with its plan to launch a Central Bank Digital Currency (CBDC) this year, confirmed Reserve Bank of India (RBI) Deputy Governor T Rabi Sankar. During a press conference following the central bank's June Monetary Policy Committee (MPC) meeting, Sankar said that the CBDC will be introduced in 2022, however the “process of introduction will be gradual” to ensure smooth implementation. The RBI first announced that it was working on its own digital currency in July last year.

Sankar said that a CBDC will indeed be launched this year, noting that the "process of introduction" will be a gradual process, to ensure smooth implementation and operations. No further information was offered by the deputy governor on the CBDC, including its expected launch date. 

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CBDC refers to the virtual form of a fiat currency, like the rupee in the case of India. The legal tender will be issued by the RBI in a digital format. Since it will be considered as a digital token of the nation's official currency, it will be regulated by the central bank. It is expected that the CBDC will support India's banking system or complement the existing frameworks. 

The RBI, however, holds a strong stance against cryptocurrencies. Last month, commenting on the recent crypto market crash, RBI Governor Shaktikanta Das said on Monday, “We have been cautioning against crypto and look at what has happened to the crypto market now.”

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The central bank has always taken a strong stand against cryptocurrencies. Speaking on the crypto crash and regulation of such assets, Das said, “Had we been regulating it already, then people would have raised questions about what happened to regulations.” 

He added, “There are big questions on how do you regulate it. Our position remains very clear, it will seriously undermine the monetary, financial, and macroeconomic stability of India.”

Das asserted that the underlying value of cryptocurrency is “nothing.”