India is Exploring Rupee-backed Central Bank Digital Currency (CBDC) to Reduce Minting Costs

Plans for a new India Central Bank backed cryptocurrency are underway – The government is figuring out the details to stay regulated within their financial policy – to help lower the need to print hard cash. The Reserve bank of India disclosed the decision inside their yearly report- released just yesterday on Wednesday – which specified the way the new digital currency would work within the country. According to the document, the bank is extremely excited about the creation of the new virtual token.

As for the reason to create a digital currency is to stay in alignment for the continually changing financial landscape, particularly within the growing popularity of cryptocurrency and virtual money. One reason the country might want a new token is that of the cost to print paper notes which is said to be close to $90 million in total each year. India’s bank didn’t clarify on the reason for the new development, although they did state it would be based on blockchain technology in conjunction with other payment solutions. Whatever reason the bank has is less important than the agreed consensus that a new Rupee backed currency is beneficial for the country, who has been in need of significant financial improvement.

Another area covered in the report regarded crypto-trading, in which the RBI still holds a firm stance on bank involvement with trading, instead of seeing P2P applications more acceptable. Any P2P-based transactions could also lead to the use of more hard currency, something that must be monitored, according to the RBI. Other issues to consider are offshore locations where crypto is used and taxation of gains on virtual currencies.

The announcement is just one of many by the RBI, as they have been showing more and more interest in cryptocurrency in the last few months.

What do you think the India banking system should do with cryptocurrency? Leave your opinions in the comment section below.