Reserve Bank’s Central Board Discusses Crypto, CBDC At Lucknow Meet

The RBI has been working towards a phased implementation strategy for a central bank digital currency (CBDC), however, it has on many occasions, expressed reservations with private crypto currencies

New Delhi:  The central board of the Reserve Bank of India (RBI) on Friday discussed various issues related to the central bank digital currency (CBDC) and private cryptocurrencies, the RBI said in a statement.

The 592nd meeting of the central board of directors, held in Lucknow, was chaired by Governor Shaktikanta Das.

The RBI has been working towards a phased implementation strategy for a central bank digital currency (CBDC), however, it has on several occasions, expressed reservations with private crypto currencies.

Last month, the governor reiterated that cryptocurrencies are a serious concern from the point of view of macro-economic and financial stability.

A central bank digital currency (CBDC) is a sovereign currency in an electronic form and would appear as liability (currency in circulation) on a central bank’s balance sheet. A 2021 survey by the Bank for International Settlements (BIS) found that 86 per cent of central banks were actively researching the potential for CBDCs, 60 per cent were experimenting with the technology and 14 per cent were deploying pilot projects.

According to a report by PTI, Finance Minister Nirmala Sitharaman recently told the Lok Sabha that there is no proposal to recognise Bitcoin as a currency. In a separate reply, minister of state for finance Pankaj Chaudhary said that the government has received a proposal from the RBI in October to amend to the Reserve Bank of India Act, 1934 and enhance the scope of the definition of ‘bank note’ to include currency in digital form.

The board reviewed the current domestic and global economic situation, evolving challenges and remedial measures. The central board also reviewed half yearly income statement of the RBI for the half-year ended September 30, 2021. It discussed various areas of operations of the Reserve Bank including the functioning of the Local Boards, activities of select Central Office Departments and the draft Report on Trend and Progress of Banking in India, 2020-21.

Deputy Governors Mahesh Kumar Jain, Dr Michael Debabrata Patra, M Rajeshwar Rao, T Rabi Sankar, and other directors of the central board were present in the meeting. Debasish Panda, secretary, Department of Financial Services also attended the meeting.