India Once Again Sidelines Cryptocurrency Regulation Plans in Favor of CBDC Launch

The government of India has continued to show little regard for the cryptocurrencies trading and mining opportunities in the country. The Finance Minister of India, Nirmala Sitharaman, recently claimed that the state is seriously considering introducing a digital rendition of the rupee before the end of 2023.

If the country goes ahead with its CBDC plans, it will become the second-largest economy in the South Asian peninsula to launch a CBDC. Furthermore, commenting on the matter of cryptocurrency regulations, the office of the Finance Ministry claimed that the country has no plans to introduce any type of digital currencies that are regulated by the Reserve Bank of India or RBI.

CBDC will Boost the Indian Economy

The amalgamation of the Centralized financial network and blockchain technology gives birth to a new type of digital token called the CBDC. According to the Finance Minister of India, the digital currency will only be the digital representation of the fiat currencies or rupee that is already the only official legal tender in the country.

Pankaj Chaudhary, the Minister of State of Finance, recently clarified that there is only a single legal tender in the country, which is the Indian rupee, under the RBI Act of 1994. He also emphasized that the Reserve Bank of India has no plans to issue any type of regulated form of cryptocurrencies anytime soon. To date, the cryptocurrency sector is mostly unregulated in the country, and the media sources claim that the government is working on coming up with a suitable legislative framework for the nascent industry.

The biggest opponent of cryptocurrencies in India is the central bank RBI. Deputy Governor of RBI, T Rabi Shankar, recently compared the asset class with a financial scam. He further added that due to the lack of underlying cash flow support and intrinsic value, the digital token industry resembles a lot of the Ponzi Schemes.

The latest statement issued by the Prime Minister of India, Narendra Modi, has also shown some enthusiasm toward the CBDC project. Modi recently claimed that the digital form of the rupee would improve the economic condition of the country by easing the pressures of traditional paper money like logistics issues, printing costs, and cash handling.

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