RBI: “digital currencies of central banks can become an alternative to fiat currencies” – Bits Media

The Reserve Bank of India has published a report on banking industry trends in the country., in which he raised the question of the problems of launching his own digital currency.

As stated in the document, presented by the Reserve Bank of India (RBI), depending on options use, Central bank digital currencies could become a comprehensive financial instrument. Government stablecoins can be used for efficient cross-border payments, so in the future they may become safe, a reliable and convenient alternative to regular money, and used by correspondent banks.

Many central banks are conducting research and discussing, how best to use digital currencies. RBI believes, that before mass adoption of any digital currency, important questions need to be addressed about its design elements, For example, will the state cryptocurrency be universal?, or it can only be used by individuals and organizations.

The regulator also noted, that taking into account the possible influence of government digital currencies on macroeconomic policy, their basic models need to be developed and thoroughly tested. This will reduce the potential negative impact of government digital currencies on global monetary policy and the banking system.

Regarding the digital rupee, it is necessary to assess the scale of its launch and distribution among the population, to determine its basic model, most suitable for performing payment transactions. RBI considers it necessary to resolve the issue, What should the digital rupee distribution architecture look like in India?. For example, will RBI be the only institution, directly issuing the digital rupee, or commercial banks can also become participants in this process.

Regulator added, that is exploring options for using its own digital currency and developing a phased strategy for its implementation with minimal risks. Previously, RBI Head of Payments and Settlement Shri Vasudevan (Shri Vasudevan) reported, that testing of the digital rupee could begin as early as next year. Former Indian Economic Affairs Minister Subhash Chandra Garg (Subhash Chandra Garg) considers, that the launch of government stablecoins will reduce the demand for cryptocurrencies.