Reserve Bank of India governor Shaktikanta Das chaired a 592nd meeting of the central board of directors, held at Lucknow on Friday, December 16, where the central board discussed various aspects related to the Central Bank Digital Currency (CDBC) and private cryptocurrencies, mentioned the press statement of RBI.
In November RBI governor Das stated that cryptocurrencies are a major source of concern for macroeconomic and financial stability. Meanwhile, RBI has been working towards a phased implementation strategy for a central bank digital currency (CBDC). The board also evaluated the present domestic and global economic situation, evolving challenges and remedial measures, as mentioned in the press release on Friday.
“The board also reviewed the half-yearly income statement of the Reserve Bank of India for the half-year ended 30 September 2021. The board also discussed various areas of operations of the Reserve Bank including the functioning of the local boards, activities of select central office departments and the draft Report on Trend and Progress of Banking in India, 2020-21," the statement reads.
CBDC refers to the digital form of a country’s fiat currency, which is issued by the central bank of the country. Though it is in digital form, it is considered equivalent to that of the fiat currency of the country. A BIS survey of January 2021 found that nearly 86 per cent of the central banks were actively engaged in researching CBDC, while 60 per cent were testing the underlying technology and 14 per cent were already in the pilot-project phase.
There are indications that India may be looking towards launching a Central Bank Digital Currency (CBDC). On the first day of Parliament’s Winter Session on November 29, the finance ministry confirmed that it has taken a proposal from the Reserve Bank of India (RBI) for an amendment to the Reserve Bank of India Act, 1934 to improve the scope of the definition of ‘bank note’ to include currency in digital form.
“Central Bank Digital Currency (CBDC) is introduced by a Central Bank. RBI has been examining use cases and working out a phased implementation strategy for the introduction of CBDC with little or no disruption,” Pankaj Chaudhary, Minister of State for Finance, stated in a written reply to a question in Lok Sabha.
The meeting was attended by Deputy Governors Mahesh Kumar Jain, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar, and other directors of central board directors Satish K. Marathe, S. Gurumurthy, Revathy Iyer, and Sachin Chaturvedi. Debasish Panda, secretary, Department of Financial Services, was also present at the meeting.