Digital Rupee is planned to launch in 2022–23, Finance Minister Nirmala Sitharaman revealed while presenting the Union Budget 2022 on Tuesday. Fintech industry stakeholders and cryptocurrency exchanges are optimistic about the move. However, some experts are raising concerns due to the lack of details at the moment.
Digital Rupee, the anticipated Central Bank Digital Currency (CBDC), is planned to be launched in 2022–23, Finance Minister Nirmala Sitharaman revealed while presenting the Union Budget for the fiscal year 2022 on Tuesday. The minister says that the digital currency will be issued by the Reserve Bank of India (RBI) and will be based on blockchain technology. It will, however, be different from regular cryptocurrencies, such as Bitcoin and Ether, which are of a decentralised nature. Sitharaman,62, noted in her Budget speech that digital Rupee — the exact name for which will be decided later — is aimed at giving a “big boost to digital economy” and lead to a “more efficient and cheaper currency management system” in the country. In her over one-hour-and-thirty minutes long speech, the finance minister did not reveal more details about the long-awaited CBDC. She, however, later explained in a press conference that the digital Rupee will be treated differently than digital assets and existing cryptocurrencies. “A currency is a currency only when it is issued by the Central Bank, even if it’s a crypto. By anything which is outside of that, loosely, all of us refer to be cryptocurrency, they are not currencies,” she said. Importantly, plans around digital Rupee have been in speculation for some time. Minister of State for Finance Anurag Singh Thakur in February last year suggested its creation while responding to a question raised in Rajya Sabha. The industry has welcomed the government’s move towards bringing its own digital currency. Nischal Shetty, CEO of cryptocurrency exchange and wallet WazirX, said that the news of launching blockchain-powered digital Rupee is “phenomenal” and shows that the country is on the path to legitimising the crypto sector. “This move will pave the way for crypto adoption and put India in the front seat of innovation,” he said. Other stakeholders in the cryptocurrency space have thoughts similar to Shetty and are optimistic of the development. “Introduction of CBDC sends a clear signal of India being a digital-first, efficiency-driven, and transparency-led system,” said Sumit Gupta, Co-Founder and CEO of cryptocurrency exchange CoinDCX. Avinash Shekhar, CEO of cryptocurrency exchange ZebPay, underlined that the launch of digital Rupee by the RBI would help familiarise Indian consumers with the benefits and efficiency of virtual currency and build an appetite for the crypto and blockchain.
