The Indian government expressed renewed skepticism toward cryptocurrencies like Bitcoin as it prepared to launch new digital currency initiatives backed by the Reserve Bank of India (RBI).
India will soon launch an RBI-backed digital currency, India’s Commerce Minister Piyush Goyal said in a roundtable during his visit to Qatar, local news agency The Hindu reported on Tuesday.
In a separate development, the RBI plans to launch a pilot on deposit tokenization on Wednesday, RBI’s chief general manager of the fintech department, Suvendu Pati, reportedly said.
According to Reuters, the RBI is expected to use the wholesale segment of India’s central bank digital currency (CBDC) as the foundational layer for its deposit tokenization pilot, collaborating with several domestic banks.
Not a stablecoin, not a CBDC
According to Commerce Minister Goyal, India’s forthcoming digital currency will be backed by the RBI and is aimed at simplifying transactions and enabling faster, more transparent transactions than traditional banking.
The minister reportedly opposed an RBI-backed project on stablecoins, claiming that the new system would facilitate transactions “more easily and efficiently.”
Source: India’s Commerce Minister Piyush Goyal“It will only make it easier to transact. It will also reduce paper consumption and will be faster to transact than the banking system,” the minister said, adding that the initiative will be backed by blockchain technology to ensure transparency and help curb illicit transactions.
Crypto is not encouraged or discouraged: “We only tax it”
While unveiling the new digital currency project by the RBI, Goyal expressed skepticism about cryptocurrencies like Bitcoin (BTC), claiming that such assets have “no back end guaranteeing any value.”
“We have not been encouraging cryptocurrency which does not have sovereign backing or which is not backed by assets,” the minister reportedly said. He emphasized that India has not banned cryptocurrency trading, adding:
Goyal’s remarks came after Bitcoin, the world’s largest crypto asset by market cap, posted a new high above $126,000 on Monday, according to data from Coinbase.
Bitcoin all-time price chart. Source: CoinGeckoIndia’s RBI has long maintained a skeptical stance on cryptocurrencies, engaging in extended discussions over whether to impose an outright ban on crypto transactions in the past.
Related: CBDCs vs stablecoins: Kazakhstan says Evo not a rival to digital tenge
The central bank launched its wholesale CBDC project, the digital rupee, in late 2022 to improve interbank settlements by reducing transaction costs.
Cointelegraph approached the RBI for comment regarding its new digital currency and tokenization initiatives, but had not received a response by the time of publication.
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