India’s Central Bank Governor Promotes Digital Rupee as a Safer Alternative to Cryptocurrencies

Last updated on October 30th, 2024 at 06:29 pm

Governor Shaktikanta Das of the Reserve Bank of India (RBI) continues to champion the country’s Central Bank Digital Currency (CBDC), known as the Digital Rupee, positioning it as a crucial tool for addressing the risks posed by cryptocurrencies.

During his speech at the Central Banking at Crossroads conference, Das highlighted how CBDCs could enhance the efficiency of international money transfers by reducing both the time and cost associated with cross-border remittances, particularly benefiting developing economies like India.

Das compared the Digital Rupee favourably to cryptocurrencies such as Bitcoin and Ethereum, emphasizing the stability and control offered by CBDCs. He also underscored the potential of CBDCs to modernize international payments, streamlining transactions in a way that could significantly improve the global financial infrastructure.

Notably, the RBI Governor has consistently advocated for CBDCs and has taken a cautious approach towards cryptocurrencies such as Bitcoin and other major altcoins. He expressed concerns about cryptocurrencies’ lack of inherent value.

India’s ongoing CBDC pilot programs are testing various features, including programmability and interoperability with systems like the Unified Payments Interface (UPI), which facilitates fast bank settlements in the country. However, despite these advances, adoption has been slow. By late June 2023, only 1 million retail transactions had been recorded. To encourage broader usage, local banks have introduced incentives, including partially paying salaries in digital currency.

India’s CBDC pilot programs are currently testing various features, including programmability and interoperability with systems like the Unified Payments Interface. However, adoption has been slow. By late June 2023, only 1 million retail transactions had been recorded. To encourage broader usage, local banks have introduced incentives, including partially paying salaries in digital currency.

Das’s remarks come at a time when India’s stance on cryptocurrencies remains ambiguous. While the RBI has previously called for a total ban on cryptocurrencies, the country’s Ministry of Finance has clarified that there are no immediate plans for legislation to regulate the market. Nonetheless, the Securities and Exchange Board of India (SEBI) is reportedly working on a comprehensive cryptocurrency policy, reflecting the growing pressure for regulatory clarity in the sector.

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