RBI Deputy Governor T Rabi Sankar on February 10 said that digital rupee will be exactly like normal, physical rupee, only it will be digital in nature.
In a press conference, the deputy governor said that it will be 1-to-1 convertible. Only it will be digital in nature. Like a normal rupee is kept in your purse or pocket, the digital rupee will be kept in your cell phone device.
He further added that the difference between digital rupee and private cryptocurrencies is that the digital rupee will be issued by the RBI.
Adding to it further, RBI Governor Shaktikanta Das said, "As far as cryptocurrencies are concerned, the RBI stance is very clear. Private cryptocurrencies are a big threat to our financial and macroeconomic stability. They will undermine RBI's ability to deal with issues related to financial stability."
"I think it is my duty to tell investors that what they are investing in cryptocurrencies, they should keep in mind that they are investing at their own risk. They should keep in mind that these cryptocurrencies have no underlying (asset). Not even a tulip!," he added.
Speaking about the timeline, the governor said that RBI Digital Rupee will be launched in the year 2022-23.
"We can’t predict a timeline for its release yet. There'll be no difference between Digital Rupee & the normal rupee. Cryptocurrency is privately created & it is a threat to financial stability," he said.
Union Finance Minister Nirmala Sitharaman on February 1 had said that the Reserve Bank of India (RBI) will launch a central bank digital currency (CBDC) in 2022-23, marking the first official statement from the Union government on the launch of much-awaited digital currency.
The FM said the introduction of CBDC will give a boost to the digital economy. The RBI had earlier indicated that CBDC is on the cards while the central bank is against the idea of permitting private virtual currencies.
The FM announced that the RBI will launch Digital Rupee and said introduction of CBDC will further enhance India's status as a digital economy given its world-class digital payments system.
Meanwhile, the Monetary Policy Committee (MPC) kept key interest rates unchanged on February 10 and retained the accommodative stance in its first policy meeting after Union Budget 2022. This is the tenth time in a row that the MPC headed by RBI Governor Shaktikanta Das has maintained the status quo.
Source: MoneyControl
