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| India can try digital rupee before December |
Central Bank of India Governor Shaktikanta Das said the Reserve Bank of India may launch its first digital currency test program before December.
Central banks, including those in China, Europe, and the United Kingdom, are screening digital currencies for issuance to commercial lenders or directly to the public.
They are known as Central Bank Digital Currencies, or CBDCs, which represent fiat rates in digital form and are essentially online versions of their fiat rates.
For India, the central bank's digital currency is the digital rupee. “We are very keen on this as it is a brand new product, not only for the Reserve Bank of India but for the whole world,” said Das.
The governor of the Central Bank of India said that the Reserve Bank of India is studying all aspects of the digital currency, including its security, its impact on India's financial sector and how it affects monetary policy and currency in circulation.
He added that the central bank is also considering a choice between a digital currency central ledger or the so-called distributed ledger technology.
A distributed ledger refers to a digital database that enables multiple participants to access, share and record transactions at the same time. A central ledger means that the database is owned and operated by a single entity, in this case the central bank.
"I think we should be able to start our first test by the end of this year," Das said. His deputy said last month that the central bank was working hard to develop a step-by-step implementation strategy for digital currencies.
India can try digital rupee before December
After a decline in the use of cash and an increase in interest in cryptocurrencies such as Bitcoin, the central bank intensified its research on digital currencies last year.
The Chinese are in the lead and many cities are conducting real-world experiments. The European Central Bank is investigating the digital euro and the Bank of England is investigating the CBDC.
Central bank digital currencies differ from cryptocurrencies in several important ways. They are fully regulated and subject to the jurisdiction of the central bank (usually a central bank).
Instead of highly volatile marketable assets. Central bank digital currency works like a legal tender and is widely accepted.