Digital version of fiat currency in works

While the Reserve Bank of India has flagged concerns over the use of cryptocurrencies, Shaktikanta Das on Thursday said the central bank is working on introducing a digital version of the fiat currency.

“We need to be watchful of the risks associated with certain technological innovations. While we are working on introducing a digital version of the fiat currency, the RBI is also assessing the financial stability implications of introducing such a Central Bank Digital Currency,” Das said, adding that as the underlying technology is still developing, the RBI is exploring ways for a safe and legally certain settlement finality, which is most crucial for a secure and efficient payment system.

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“It also needs to be appreciated that there are not many practical instances of operationalisation of CBDC across the world; this calls for utmost precaution so that we can produce a safe and robust model,” Das said.

Das said he has “reasons to believe” that the government is in agreement with the “major concerns” flagged by the RBI about cryptocurrencies.