Reserves Bank Of India Postpones Cryptocurrency Plans

News | January 2, 2019 By:

The Reserve Bank of India’s (RBI) has postponed its plan to launch a central bank digital currency (CBDC).

In April 2018, RBI assembled an inter-departmental group to study and provide guidance on the desirability and feasibility to introduce a CBDC. At the time, the central bank said that the major factor behind the bank‘s decision to consider launching a CBDC in India is rapid changes in the landscape of the payments industry.

Now, an anonymous source has told local news outlet The Hindu Business Line that “the government doesn’t want the digital currency any more. It thinks it is too early to even think about a digital currency.”

Commenting on the news, Praveen Kumar, founder of cyrptocurrency exchange and blockchain startup Belfrics, said that it’s premature for RBI to launch CBDC as more understanding of the crypto economy need 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,” Kumar said.

Several central banks around the world have been exploring the feasibility of issuing a CBDC, including the Riksbank, the Bank of Canada, the Bank of Thailand, Norges Bank, and others, but none has gone ahead with it.

“Cryptocurrencies will be mainstream and ubiquitous, and governments all over the world will launch fiat cryptocurrencies, whether out of compulsion or choice,” said Kunal Nadwani, CEO of uTrade Solutions and a blockchain expert. “Since governments have the power of taxation, and they can declare any digital token as legal tender for payment of taxes, they can have fiat tokens. But it will take time before central banks are able to make this transition because the economic effects of crypto are sizeable and largely unknown.”