NEW DELHI: Minister of State for Finance Pankaj Chaudhary said in a written reply in the Rajya Sabha on Tuesday that the Reserve Bank of India (RBI) is working on phased implementation of central bank digital currency.
In the Budget speech on February 1, Finance Minister Nirmala Sitharaman had announced that the Reserve Bank of India would roll out its digital currency in 2022-23. The RBI is currently studying issues related to cyber-security in digital rupee, Minister of State for Finance Bhagwat Karad also said in a written response to another question in the Rajya Sabha.
The RBI has been taking calibrated steps for phased launch of the proposed digital currency, Deputy Governor T. Rabi Sankar had said in April. The RBI is examining issues related to data privacy, cybersecurity and energy consumption before starting a pilot project for the digital currency, Deputy Governor Michael Patra had said earlier.
The central bank is framing several considerations on the scope and legal framework of the proposed CBDC that will likely coexist with cash and digital forms of payments.
Notably, private virtual currencies like Bitcoin do not fit RBI's definition of currency and one of the factors driving central banks around the world including India to experiment with CBDC is to minimise the risks of cryptocurrency on the real economy.
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