Reserve Bank eyes fiat cryptocurrency

NEW DELHI: With the Reserve Bank of India (RBI) now saying that it is exploring the need for a digital version of fiat currency, cryptocurrency stakeholders have called to move a step in the right direction towards strengthening the fintech ecosystem in the country.

The RBI made the remarks in a booklet titled "Payment and Settlement Systems in India" released this week.

"Private digital currencies (PDCs) / virtual currencies (VCs) / crypto currencies (CCs) have gained popularity in recent years. In India, the regulators and governments have been sceptical about these currencies and are apprehensive about the associated risks," said the booklet.

"Nevertheless, the RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and in case there is, then how to operationalise it," it added.

The cryptocurrency dustry in India has inwelcomed the move.

"The fact that the RBI is mulling over introducing a central bank digital currency (CBDC) in the country is a step in the right direction," Sumit Gupta, CEO and Co-Founder, CoinDCX, a cryptocurrency exchange, told IANS.

The apparent softening in RBI's stand on cryptocurrency came after the Supreme Court last year set aside a circular issued by the RBI that barred any entity from providing banking services to anyone dealing with virtual or cryptocurrencies.

The RBI in its booklet on payment systems noted that central banks around the world are examining whether they could issue fiat money in digital form.