The finance minister revealed plans to introduce a digital rupee or CBDC using blockchain. Nirmala Sitharaman made the remarks while presenting the 2022 budget.

Nirmala Sitharaman, finance minister, declared digital rupee introduction by the RBI in the 2022 Union Budget. He revealed that the bank would use blockchain technology to issue the central bank’s digital currency.

In 2021 October, the Reserve Bank of India received permission to amend the RBI Act 1934 to include digital currencies in its ‘bank note’ definition. Earlier, the bank stated that CBDC could introduce significant benefits, including reduced reliance on cash.

Finance ministry minister Pankaj Chaudhary replied, stating that the bank will introduce the CBDC. He added that the Reserve Bank of India evaluated use cases while working on a phased implementation approach to introduce the digital rupee without any disruption.

The minister responded to a query associated with a digital currency introduction, stating the move will present significant benefits.

Chaudhary replied that CBDC introduction will mean benefits like reduced settlement risks, higher seigniorage because of lower transaction charges, and reduced cash reliance. He added that CBDC would potentially translate to more efficient, robust, regulated, trusted payment options. However, the official believes associated parties should evaluate risks against potential benefits.

The government’s response follows RBI’s CBDC inclusion in the upcoming crypto regulatory bill. Meanwhile, Economic Tomes quoted government sources, stating the crypto bill emerged to respond to the central bank’s concerns, citing macro-economic stability. The official declared the government has no plans to ban crypto but issue the asset via the Reserve Bank of India.

The crypto Bill highlighted by the Lok Sabha bulletin plans to ban all private digital assets. Besides that, the law wants to issue its digital currency, supported by the RBI.

Moreover, the bill proposed a facilitative framework for its digital rupee. Also, the bulletin revealed India would allow some exceptions to encourage crypto’s underlying technology. The nation seems prepared to launch its digital coin this year.

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