• The Reserve Bank of India (RBI) has announced that 50,000 users and 5,000 merchants are now using its central bank digital currency (CBDC).
• Currently, 770,000 digital rupee transactions have been processed by eight banks. Five more banks are set to join the pilot soon.
• India’s largest retailer Reliance Retail plans to accept payments in digital rupees with the help of three partner banks.
Digital Rupee Now Has 50,000 Users
The Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar has revealed that 50,000 users and 5,000 merchants are now using its central bank digital currency (CBDC). Digital rupee transactions are currently being processed by eight banks with five more set to join the pilot soon. The retail digital rupee pilot began on Dec. 1 last year in five cities but is gradually being expanded to nine more cities. About 770,000 digital rupee transactions have been conducted so far. Deputy Governor Sankar stressed that the RBI will move forward cautiously with the initiative to ensure all potential impacts are understood before any actions are taken.
Reliance Retail Accepting Payments in Digital Rupees
India’s largest retailer Reliance Retail recently announced plans to accept payments in digital rupees through ICICI Bank, Kotak Mahindra Bank, and fintech Innoviti Technologies across its gourmet store line Freshpik nationwide. According to Atlantic Council’s CBDC tracker 114 countries representing over 95% of global GDP are currently exploring a central bank digital currency.
RBI Skeptical about Cryptocurrencies
Despite this progress in developing a CBDC for India’s economy, RBI Governor Shaktikanta Das has continued to recommend a complete ban on cryptocurrencies like bitcoin and ether citing risks they pose to financial systems and could cause another financial crisis if not banned outrightly. He also said these virtual assets do not have any underlying value either as an asset or commodity and would undermine the authority of RBI if allowed into circulation freely.
Current Status of Indian Crypto Regulations
At present Indian crypto regulations remain unclear as the Supreme Court overturned an RBI circular issued in 2018 which had ordered all banks not to provide services related to cryptocurrencies or their trading activities while allowing exchanges regulated by SEBI or other authorized bodies like RBI itself legal tender status . This decision effectively opened up banking facilities for cryptocurrency exchanges thus allowing them access to banking services after filing necessary KYC documents with their respective banks – something which was denied earlier due to lack of regulations around it . However , there is still no clear indication from government yet about how this nascent industry will be regulated going forward .
Conclusion
The Reserve Bank of India’s recent announcement regarding its CBDC reveals positive developments towards introducing a new form of payment system within the country . Nevertheless , uncertainty surrounding crypto regulations remains , while authorities continue recommending a complete ban on cryptocurrencies amid warnings they could cause another financial crisis if not controlled properly .