Indian Central Bank RBI is Reportedly Exploring the Need of Cryptocurrency in Payment Sector

Reserve Bank of India (RBI), the Indian central bank is reportedly looking at the use cases of cryptocurrencies in the growing payment sector as per a report in the Economic Times.

The Indian Central Bank reportedly released a booklet covering the journey of digital payment and settlements in India in 2020, where it suggested that they are exploring the need for cryptocurrencies in the current financial system, and if there is a need than what is the scope of it and what regulatory changes would be required.

The central bank in its report said,

“Private digital currencies (PDCs) / virtual currencies (VCs) / cryptocurrencies (CCs) have gained popularity in recent years. In India, the regulators and governments have been skeptical about these currencies and are apprehensive about the associated risks. Nevertheless, RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and in case there is, then how to operationalize it,”

The RBI is also set to release a Digital Payment Index (DPI) capturing the extent of digitization of payments in the country and that report could well indicate the government’s move towards the rising popularity of cryptocurrency and its fate in India. The RBI said,

“The RBI-DPI has since been constructed with March 2018 as the base period, i.e. DPI score for March 2018 is set at 100. RBI-DPI was published on January 01, 2021, and the DPI score for March 2019 and March 2020 were 153.47 and 207.84, respectively,”

Is RBI Changing Stance on Crypto?

The RBI booklet exploring the need for cryptocurrencies in the current digital payment system is a big boost for crypto entrepreneurs in the country, given until now RBI has maintained a passive stance on crypto starting with the infamous circular back in April 2018 banning banking services to the crypto companies.

The banking ban was quashed by the Supreme Court in March this year bringing much-needed relief to the budding Indian crypto sector.