Less than a year after India’s Supreme Court lifted the Reserve Bank of India’s ban on crypto-business, the bank’s position on digital assets looks a little more optimistic.
According to a booklet on payments released today by the Reserve Bank of India (RBI), the bank is “looking into the possibility of the need for a digital version of fiat currency”. The bank added that it would look for ways to leverage digital currency if necessary.
The RBI brochure recognized the popularity of cryptocurrencies around the world, but claimed that Indian regulators and local government agencies were both “skeptical” and “concerned” about them. The bank describes digital currencies of the central bank as legal tender in the country, but also calls them “a central bank liability in digital form”.
The Indian government had a complicated relationship with digital currencies. In March last year, the country’s Supreme Court lifted a general crypto ban that the RBI had imposed on crypto companies since April 2018. The number of exchanges has increased as a result of the Supreme Court ruling, but many in the crypto space have raised concerns about the future of the industry in the nation.
Such a large bank developing digital currency could easily promote the adoption of crypto in India and beyond. The RBI reported that there has been “exponential growth in digital payments” in the country, with volume and value increasing 12.5% and 43% respectively since 2011. The bank added that it could expand adoption by adding it is aimed at “the generation that is most responsive to technology and the digital age” – people born between 1982 and 2004.