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India's Central Bank In Search For A Rupee-Backed Digital Currency

India's Central Bank In Search For A Rupee-Backed Digital Currency
George Samprovalakis 03 September 2018

RBI panel to study feasibility of digital currency 

The Annual report ofRBI (Reserve Bank of India) that was posted on Wednesday revealed the news, which indicated an inter-departmental team unit has already been assigned to research at the "desirability and feasibility to introduce a digital currency by the central bank."

The attempt seemingly comes in response to a swiftly converting landscape of digital payments and the "rising fees and costs of dealing with fiat paper/minted cash," the financial institution said.

Similarly the Economic Times -on Thursday- pointed out in a report that the RBI also stated that, for 2018, the price of printing paper notes totaled almost $90 million alone.

Even as the Reserve Bank of India did now not display whether the possible central bank digital currency (CBDC) can be blockchain-supported, it claimed the utilization of distributed ledger technology (DLT) in charges and payments "holds the promise of good sized financial advantages in the near future."

In the meantime, in contrast to its support for adoption of distributed ledger technology at a country level, the Reserve Bank of India once more declared in the report the will to toughen its stance on crypto trading, turning its attention to transactions among individuals following its ban on bank accounts for exchanges that  announced in April.

"Developments on this front need to be monitored as some trading may
shift from exchanges to peer-to-peer mode, which may also involve
increased usage of cash,"

the rbi warned in its yearly record, adding:

"Possibilities of migration of crypto exchange houses to dark pools/cash
and to offshore locations, thus raising concerns on anti-money /CFT and
taxation issues, require close watch."

The Reserve Bank of India ban for bank accounts went live i July. Since then local exchanges are trying to adopt a spectrum of methods in order to reveal new models for revenue, including P2P trading as a solution. 

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