RBI Will Launch Digital Currency In India; But No Plans For Cryptocurrency (Clarifications Issues!)
The government has no plans to introduce cryptocurrency, informed the minister of state for finance Pankaj Chaudhary to the Rajya Sabha on Tuesday. As of right now, cryptocurrencies are unregulated in India, he stated in a written reply.
Central Bank Digital Currency
The central bank of India RBI does not issue cryptocurrency. Paper currency is considered as the official legal tender of India and it is issued by RBI in compliance with the terms of provisions of RBI Act, 1994. Recently, a digital version of traditional paper currency is going to be launched by the RBI. This digital currency is called Central Bank Digital Currency (CBDC).
Currently, RBI is working on creating a phased implementation strategy for the introduction of CBDC. The central bank is examining use cases which could be implemented with little or no disruption, he said in another reply.
The introduction of CBDC has the capability of providing huge benefits like lessening dependence on physical cash, more seigniorage because of lower transaction costs, etc, he added.
Note printing has decreased
Printing of notes has decreased gradually over time, he said, adding, during the time period of 2019-20 notes worth Rs. 4,378 crore were printed which went down to Rs. 4,012 crore in the time period of 2020-21.
In reply to another question, he said that the financial health of the country includes many facets.
“Stable stock market along with well-functioning and sophisticated market infrastructure is one indicator to assess a country’s financial health. The stock markets are indicative of economic growth in the medium to long term as the stock prices reflect the market’s expectation on future corporate earnings/profitability and hence the underlying confidence in economy,” he said.
But, he said, in the short term, the stock markets are mainly driven by economic and geopolitical events.
Exchanges have always imposed exchange transaction fees on the broker which might get passed down to clients, he said and added that the transaction fee is mentioned in the contract note which is issued to clients by brokers.
The taxes charged on the sale and purchase of stocks including the taxes charged by exchanges are mentioned in the contract note issued to clients by brokers at the end of every day of trading, he said.
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