According to the report by the Central Bank of India, establishing an initial baseline model for the CBDC may make sense “given its dynamic impact on macroeconomic policy making.”
As India continues to grapple with an uncertainty around crypto regulation, the Reserve Bank of India (RBI) believes it would be better to present the basic model of the CBDC in the first place before a more complex version is released.
RBI detailed its thoughts on CBDC in its report “The Trend and Progress of Banking in India 2020-21”.
The following statement was noted in the report presented:
“Basically, a central bank digital currency (CBDC) offers a safe, robust and convenient alternative to cash. Compared to existing currencies, it can offer users advantages in terms of liquidity, scalability, and anonymity, as well as ease of transaction and faster payment. ”
RBI is planning a phased implementation for the CBDC. It is therefore desirable to first introduce a basic model of the CBDC and have minimal impact on monetary policy and the banking system. Thus, a test phase for the CBDC will also take place.
Rabi Shankar, RBI Vice President, states that studies are being carried out on two different CBDCs, wholesale and retail, and more work is already being done on wholesale CBDC. In addition, he emphasized that no matter which of these species is ready first, the pilot test will be carried out.
In India, the crypto bill continues to be on the agenda. However, it is stated that the bill will probably not become law until the end of next April.
