Finance Minister Nirmala Sitharaman confirmed that the Reserve Bank of India will issue a digital rupee soon on Tuesday morning. The RBI’s digital currency will be based on blockchain technology, which is the same technology that powers Bitcoin and other popular cryptocurrencies. The finance minister stated that a digital rupee would be issued by 2022-23, but did not elaborate on the future of Bitcoin and other crypto tokens.
“Digital currency will also lead to a more efficient and cheaper currency management system. It is therefore proposed to introduce a digital rupee using blockchain and other technologies, to be issued by the Reserve Bank of India, starting 2022-23,” the finance minister said.
Last year, the RBI expressed interest in introducing a digital currency. The government was planning to prohibit the use of cryptocurrencies in the country at the time. Things came to a halt after a committee was formed to hold discussions with key stakeholders and make recommendations on the country’s cryptocurrency future.
Later, the draft of crypto bill suggested that the government may still ban all cryptocurrencies in the country to promote a possible digital currency from the RBI.
“To create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India. The Bill also seeks to prohibit all private cryptocurrencies in India. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 read.
