Less than a year after the Indian supreme court overturned the Reserve Bank of India’s ban on crypto businesses, the bank’s position on digital assets is looking slightly more bullish.
According to a booklet on payments released today by the RBI, the bank is “exploring the possibility as to whether there is a need for a digital version of fiat currency.” The bank added that if it found a need, it would look into ways to put digital currency into use.
The RBI booklet acknowledged the popularity surrounding cryptocurrencies worldwide but claimed that Indian regulators and local government bodies are both “skeptical” of and “apprehensive” about them. The bank referred to central bank digital currencies as legal tender in the country but also called them “a central bank liability in digital form.”
India’s government has had a complicated relationship with digital currencies. In March 2020, the country’s supreme court effectively overturned a blanket ban on crypto that the RBI had imposed on crypto businesses effective April 2018. The number of exchanges has grown in response to the supreme court ruling, but many in the crypto space have expressed their concerns over the future of the industry in the nation.
Such a large bank developing a digital currency could easily further crypto adoption in India and beyond. The RBI reported that there has been an “exponential growth of digital payments” in the country with a 12.5% and 43% increase of volume and value, respectively, since 2011. The bank added that it may expand adoption by targeting “the generation which is most responsive to technology and digital age” — people born between 1982 and 2004.