By India’s plans to issue a government-backed token have been shelved, for now, mere months after the country’s central bank expressed interest in the idea.
As per The Hindu Business Line, the Indian government is no longer interested in a state-backed rupee token. The publication, citing a source in their report alluded to the fact that the promise of a crypto-rupee was abandoned due to being a premature move:
“The government doesn’t want the digital currency any more. It thinks it is too early to even think about a digital currency.”
A Carefully Considered Decision?
This move to postpone the plans for a crypto-rupee was supported by many well-known experts in India’s crypto community. Included in this list of experts was Kunal Nadwani, a local blockchain expert and chief executive at uTrade Solutions who was at the helm of the decision. Nadwani argued that the ‘economic effects of crypto are sizeable and largely unknown’.
In agreement with Nadwani and the other Indian crypto, bigwigs were Praveen Kumar, founder of Belfrics, a crypto exchange with their main bases of operations in Asia and Africa. Kumar argued that the Indian government should wait until smaller, yet more advanced countries such as the likes of Singapore and the UAE, have experimented with state-backed tokens before diving in:
“It is premature for RBI (Reserve Bank of India) to launch crypto-rupee, as more understanding of the crypto economy needs to be achieved. It is a right decision to delay the process and see how the publicly traded peer-to-peer economy is shaping up.”
Reserve Bank Of India’s Digital Currency:
The decision to postpone a state-backed token comes five months after it was reported that the Reserve Bank India (RBI) was considering plans to launch a Central Bank Digital Currency or CBDC.
The RBI indicated in an annual report, which was published back in August 2018, that the core purpose of their CBDC was to facilitate domestic transactions. Furthermore, India’s central bank also made it clear that a CBDC would be helpful in the reduction of the increasing costs found when managing physical cash. Not to mention the fact that it would also help combat money laundering.
The RBI, at the time, assigned the task of gauging the plausibility of a CBDC to an inter-departmental group appointed by them:
“An inter-departmental group has been constituted by the Reserve Bank to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency (CBDC).”
A year before this, the research arm of the RBI, the Institute for Development & Research in Banking Technology released a whitepaper which determined that blockchain technologies had in fact already matured enough to support a CBDC.
Perhaps a CBDC could arrive sooner than India’s crypto experts think? Maybe if the Indian government lifts the ban on cryptocurrencies as reported by CoinBeat earlier today, perhaps this could speed up the path towards a crypto-rupee? Let us know if you agree by leaving a comment below.
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