Lagatar24 Desk
New Delhi, Nov.29: The government on Monday announced that it had received a request from the Reserve Bank of India (RBI) to include digital currency in the definition of a “bank note.” The RBI proposed a Central Bank Digital Currency proposal in October (CBDC).
CBDCs (digital or virtual currency) are the digital equivalents of fiat currencies.
The Ministry of Finance, in a written reply in Lok Sabha, stated, “Introduction of CBDC has the potential to provide significant benefits, such as reduced dependency on cash, higher seigniorage due to lower transaction costs, reduced settlement risk.”
It would also possibly lead to a more robust, efficient, trusted, regulated and legal tender-based payments option, the Ministry added.
The Ministry did say, though, that “there are potentially related hazards that must be carefully assessed against the potential advantages.”
In another reply, the Centre stated that it “has no proposal to recognise Bitcoin as a currency in the country.”
As investors wait for more regulatory certainty, the price of key cryptocurrencies in the country has seen huge volatility.
Prime Minister Narendra Modi convened a high-level meeting on cryptocurrencies earlier this month, which included officials from the Reserve Bank of India, the Finance Ministry, and the Securities and Exchange Board of India (SEBI).
Meanwhile, the Reserve Bank of India has expressed concern about cryptocurrencies being a threat to macroeconomic and financial stability.
