Reserves Bank of India Pauses its Plan of Central Bank Digital Currency like Bitcoin

The Reserve Bank of India (RBI) paused its efforts to launch its own digital currency like bitcoin, according to the Indian media outlet, The Hindu Business Line.

Previously in April 2018 in its Annual Report, the Reserve Bank of India looked into the feasibility of central bank digital currency and said: "In India, an inter-departmental group has been constituted by the Reserve Bank to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency."

On 11th April 2017, RBI notified that virtual currencies as a medium of payment are not authorized by any central bank or monetary authority regulated by RBI.

Subsequently, on 12th April 2017, Indian Government notified that it has set up an Inter-Disciplinary Committee chaired by Special Secretary (Economic Affairs) to examine the existing framework with regard to Virtual Currencies.

However, an anonymous source informed The Hindu Business Line in the news report and mentioned, “The government doesn’t want the digital currency anymore. It thinks it is too early to even think about digital currency.”

Pon Radhakrishnan, the Minister of State for Finance, told the Lok Sabha, the lower house of Indian Parliment, was recently quoted saying: “In absence of a globally acceptable solution and the need to devise a technically feasible solution, the department is pursuing the matter with due caution. It is difficult to state a specific timeline to come up with clear recommendations.”

Globally, most of the state governments are exploring mechanisms to leverage virtual currencies but struggling with the regulations. Last year, at G20 summit, the group of the world’s 20 biggest economies, agreed to introduce regulations on Virtual currencies (a word used instead of crypto-assets) to counter money laundering and financial terrorism. The summit was also attended by interdisciplinary committee members of Indian Government. The Financial Action Task Force (FATF) recommendations are recognized as the standard against the global anti-money laundering (AML) and counter-terrorist financing (CFT) released its report on G20 Leaders’ Summit.

A recent report also suggests that India plans strict regulation of the cryptocurrency market instead of a total ban.