INSUBCONTINENT EXCLUSIVE:
Country's own official digital currency is likely to arrive by early next yearNew Delhi: India's very own official digital currency is
likely to debut by early 2023, which will mirror any of the currently available private company-operated electronic wallets, but with a
change that it will be a sovereign-backed facility, a top government source said.Finance Minister Nirmala Sitharaman in her budget speech
last week talked about launching a central bank-backed 'digital rupee' soon.A top government source, who wished not to be identified said,
the digital currency issued by the RBI would be numbered in units, just like every fiat currency has an unique number."The units issued in
digital rupee would be included in the currency in circulation
It would not be very different from fiat currency
It would be more like an electronic form of fiat currency, so in a sense it would be a government-mandated electronic wallet," the source
said.The RBI has indicated that the digital rupee would be ready by the end of next financial year, the source added.The digital rupee
blockchain, being developed by the Reserve Bank, would be able to trace all transactions, unlike the current system of mobile wallet offered
by private companies.Explaining further, the source said that using electronic wallet offered by private companies, people currently
transfer money to the private company who holds the money on his/her behalf and pays to a merchant when there is any transaction."In the
case of a digital rupee instead of holding a note you will be holding a digital currency in your phone and it would be with the central bank
and from there it would be transferred to any merchant
It is fully backed by the sovereign," the source said.If the money is transferred to the e-wallet of a private company, then credit risk of
that company is also attached to the money besides charges levied by such companies."Instead of carrying this wallet, I will carry money on
the phone," the source said.In the 2022-23 Budget, Finance Minister Nirmala Sitharaman had said that introduction of Central Bank Digital
Currency (CBDC) will give a big boost to digital economy."Digital currency will also lead to a more efficient and cheaper currency
It is, therefore, proposed to introduce Digital Rupee, using blockchain and other technologies, to be issued by the Reserve Bank of India
starting 2022-23,” the minister had said.The exact regulation governing this Central Bank Digital Currency (CBDC) is yet to be
finalised.CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies or cryptocurrency that have
mushroomed over the last decade
Private virtual currencies do not represent any person's debt or liabilities as there is no issuer.The government has already said that
private cryptocurrencies will never be a legal tender
The RBI has been strongly opposing private cryptocurrencies as they could have implications on national security and financial stability.
