Reserve Bank of India to launch its own digital currency

The Reserve Bank of India is exploring the possibility of a nation blockchain-based digital currency saying it the best possible attempt to improve efficiency and inclusiveness of the country’s financial system.

 The country’s apex bank further has asked the users, traders and holders of virtual currencies to stop proceeding further with virtual currencies.

The monetary policy committee of the regulatory bank, which met on Wednesday and Thursday set up a panel for feasibility study and the report is expected towards the end of June.

 The central bank authorities claimed to have seen every potentials to improve the financial system with technological innovations.

 RBI, which has proposed to circulate the central digital currencies in addition to the paper currency notes further aims at reducing the printing cost. The bank has already sent a set of instructions to the affiliated banks across the country not to proceed with the virtual currencies.

It has asked the existing regulated entities to shed the relationship within a specified time frame. The bank is expected to come out with a formal circular in a day or two.

 The move assumes significance when Singapore is in a process to introduce a dollar in tokenize form (Singapore dollar) while China is also stopped cryptocurrency exchanges.

 In his 2018-19 Union Budget speech, Union Finance Minister Arun Jaitley the government was averse to consider cryptocurrency as legal tender and that it would gradually eliminate the use of such assets which would help the country check the illegitimate activities.

The ministry of corporate affairs has already set aside cryptocurrency exchange registration while the leading banks have withdrewn support for crypto assets.