‘RBI internal panel working on model of central bank’s digital currency’

The government last week moved to ban private cryptocurrencies.

Mumbai: An internal committee within the RBI is taking a close look at the model of the central bank’s digital currency and will come out with its decision “very soon”, Deputy Governor B P Kanungo said on Friday.

It can be noted that the RBI had earlier announced its intent to come out with an official digital currency, in the face of proliferation of cryptocurrencies like Bitcoin about which the central bank has had many concerns. The government last week moved to ban private cryptocurrencies.

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“With regard to digital currency, I think we have already released our document. Our digital payment document spells out that digital currency is work in progress in RBI,” Governor Shaktikanta Das told reporters on Friday.

Kanungo said having a digital currency was an announcement done by the monetary policy committee some time ago. “We had a committee that is still on the drawing board. In fact, an internal committee is taking a close look to decide on the model of the central bank digital currency and you will hear from the Reserve Bank very soon in the matter,” he added.

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.

“Nevertheless, 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,” the central bank had said in a report in January.