The Reserve Bank of India (RBI) says in its annual report of 2021-2022 that it will take a ‘graded approach’ towards the launch of the Central Bank Digital Currency (CBDC).
The report, which was published on May 27, states that “The Reserve Bank is engaged in the introduction of a central bank digital currency (CBDC) in India.”
The bank has been weighing the pros and cons of the introduction of the digital currency in the country.
The RBI is currently examining “the appropriate design elements of CBDCs that could be implemented with little, or no disruption.”
“The design of CBDC needs to be in conformity with the stated objectives of monetary policy, financial stability and efficient operations of currency and payment systems,” states the report.
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RBI plans to “adopt a graded approach to introduction of CBDC, going step by step through stages of proof of concept, pilots and the launch.”
The plan to introduce a digital currency was announced by India’s Finance Minister Nirmala Sitharaman earlier this year.
The report concludes by saying, “An appropriate amendment to the RBI Act, 1934 has been included in the Finance Bill, 2022. The Finance Bill, 2022 has been enacted, providing a legal framework for the launch of CBDC.”
The Finance Bill 2022 failed to recognize the legality of cryptocurrencies in the country, however laid out the taxation rules for them, levying a 30% income tax on them.
