The Digital Rupee is intended to boost the country’s banking infrastructure, allowing them to offer modern services more easily while also reducing costs for consumers and businesses.
The launch of India’s first state-backed cryptocurrency dubbed Digital Rupee could happen as early as the first quarter of 2023, according to a report by CryptoNewsReview
(CNR). While fiat money is printed or minted by governments and backed by states, cryptocurrencies are created via complex computer algorithms.
The Center has set up an interdisciplinary committee which will recommend measures for setting up cryptocurrency within three months, The Hindu Business Line reported on February 12, 2019.
The Committee headed by Subhash Garg department of economic affairs secretary was formed last month after it decided that Japan-based IT giant GMO Internet Group would invest $300 million (about Rs 2,000 crore).
Garg had told PTI in January that blockchain technology which is used for cryptocurrencies can be adopted by the government with certain modifications.
The report also stated that the committee has been tasked with examining development of blockchain technology, legal issues related to cryptocurrencies and how they can be integrated into the financial system in future.
In March 2018, Subhash Chandra Garg had said that a central bank digital currency (CBDC) might become a reality in India only after two years. The Union cabinet secretary had also stated that a move to introduce CBDC was still some time away while adding that it would not require any printing of physical money while noting its relevance given cost benefits and efficiency linked to such currencies.
On the other hand, Japan’s SBI Holdings Inc is reportedly planning to invest $9.2 million (over Rs 60 crore) in a blockchain startup – Coins.ph, which works on cryptocurrency services.
The report added that the blockchain firm will be using its investment to improve financial inclusion of people suffering from lack of banking access by offering mobile payment services for social security benefits via SBI’s virtual currency exchange VCTRADE.
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Expected to be introduced in early 2023
The Narendra Modi government is likely to introduce Digital Rupee by early 2023 are among the highest denomination currencies in the world operationalised in next three years one of several denominations issued by RBI, as part of what is known as “paper currency”, along with smaller denominations of Rs 5, Rs 10,Rs 20 , Rs 50 and Rs 100 . However RBI is yet to release an official statement about Digital Rupee.
Further it is also said that RBI has not yet released any official statement about Digital Rupee and there’s speculation around this news.
Indiaâ€™s central bank Reserve Bank of India (RBI) has also started working on it and expects that the new currency will be operationalised in the next three years. The Narendra Modi government is likely to introduce Digital Rupee by early 2023, says a report. However RBI is yet to release any official statement about Digital Rupee.