Nirmala Sitharaman Says Discussions On With RBI Over Digital Currency

RBI Governor Shaktikanta Das said that decision on issuance of green bonds next month

New Delhi: Finance Minister Nirmala Sitharaman on Monday said talks with regard to Central Bank Digital Currency (CBDC) have been going on with the Reserve Bank of India (RBI) and a decision will be taken after due deliberations.

Sitharaman in her Budget speech had announced that Digital Rupee or CBDC would be issued by the RBI in the coming fiscal year. She had also announced the government will levy 30 per cent tax on gains made from any other private digital assets from April 1.

Replying to questions after addressing the RBI's central board on Monday, the minister said the central bank and the government are on board regarding digital currencies. She said the discussions with the RBI regarding the CBDC were going on prior to the Budget announcement, and they are continuing.

RBI Governor Shaktikanta Das added that like several other issues, this particular issue is internally under discussion between the RBI and the government. "Whatever points we have we discuss with the government," he added.

CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies or cryptocurrency that have mushroomed over the last decade. Private virtual currencies do not represent any person's debt or liabilities as there is no issuer. They are not money and certainly not currency.

Reserve Bank Governor Shaktikanta Das on Monday said the decision with respect to issuance of sovereign green bonds announced in the Budget will be taken next month.

Finance Minister Nirmala Sitharaman said,"The proceeds from sovereign bonds to mobilise resources for green infrastructure will be deployed in public sector projects which help in reducing the carbon intensity of the economy."

Das said the monitoring group on cash and debt management will meet next month and it will plan for the issuance of green bonds.

"The main rationale behind going for green bond is that world over there are a lot of investors who have dedicated funds to invest in green bonds. So, basically when you float a green bond, ... (it) has a specified and dedicated purpose," he said.