RBI working on phased introduction of digital currency

The Reserve Bank of India is working on phased introduction of its own digital currency and is mulling pilot projects in wholesale and retail segments in the near future.

Daily Current Affairs Quiz 2021

Several countries have implemented specific purpose Central Bank Digital Currencies (CBDCs) in the wholesale and retail segments.

A CBDC is a legal tender issued by a central bank in a digital form. It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency.

The finance ministry, in 2017, had set up a high level inter-ministerial committee to examine the policy and legal framework for regulation of virtual / crypto currencies. It had recommended the introduction of CBDCs as a digital form of fiat money in India.

The RBI has also been exploring the pros and cons of introduction of CBDCs since quite some time.