Digital currency to come out from RBI itself this year: Finance Minister

Union Finance Minister Nirmala Sitharaman said that the Digital Rupee is a conscious call taken in consultation with the Reserve Bank of India (RBI), and the government sees clear advantages in a central bank-driven digital currency.

“It was a conscious call taken in consultation with the central bank- the Reserve Bank of India….we would like them to design it the way they would like to do it, but this year we expect the currency to come out from the central bank itself,” Sitharaman said, in response to a question on Digital Rupee, at the India Global Forum’s annual summit in Bengaluru.

“We see clear advantages in a central bank-driven digital currency, because in this day and age, bulk payments happening between- countries, large transactions between institutions and large transactions between central banks themselves of each country- are all better enabled with digital currency,” Sitharaman said.

Asked about regulating the crypto sector, the Minister, not willing to get into whether the government would be regulating or banning it, said that the government would be talking about it after consultations.

“The consultations are on…. anybody interested in this domain are welcome to participate, after the consultation process gets duly completed, the Ministry would probably sit and mull over it, which is required because we need the executive to be sure that we are not crossing any legal requirements, post which we will be coming out with what’s our position on it,” Sitharaman said.

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To a question whether she sees a future for crypto in India, Sitharaman said, “many Indians have seen a lot of future in it, and therefore I see a possibility for revenue in it.”

Speaking on the Budget 2022-23 recently presented by her, the Minister said that the reference to the Amrit Kaal in the Budget is for more and more of digitisation, more and more of technology.

Sitharaman said, “Infusing technology into the country in every aspect of our business is going to be a challenge, because we are also labour rich, in the sense intense skilled, semi-skilled, partly skilled, high technology skilled youngsters are in abundance, so how are we going to have these two sit side by side, without hurting each other, that is where this budget is important.”

Pointing out that 75 Digital Banking Units (DBUs) have been announced in this Budget, Sitharaman said that India needs them because the country is at a stage, where in spite of pushing through a nationalised banking network for 75 years, banking and financial inclusion have not been as much as what we wanted them to be.

“The announcement of DBUs implicitly meant that we are looking for people who want to set it up and that we (govt) will be with them,” Sitharaman said, while pointing out that common citizens of India have adapted to digital mode of doing businesses and facilities need to be provided for it without hesitation.

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Highlighting that the way in which an economy like India addresses its demand-side issues is also to look at the bottom-most layer of our population, which has several disadvantages, the Minister said that it needs to be ensured that they don’t remain hungry, they are not uncertain about food requirements to their family, and meet their emergency expenditures like health.

“Demand-side is being addressed in the ways in which it directly makes a difference to the daily livelihood of the person….” Sitharaman added.

(With inputs from Agencies)