Central Bank of India is exploring the possibility of introducing cryptocurrencies to reduce costs

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Central Bank of India is exploring the possibility of introducing digital currency Central Bank (CBDC) supported the rupee, in its monetary policy to reduce the annual cost of producing physical money.

This information was disclosed in the annual report of the Reserve Bank of India (RBI) published
Wednesday. It notes that within the organization already has established an interdepartmental unit to study “the desirability and feasibility of creating a digital currency by the Central Bank.”

This idea dictated the rapid development of the industry of digital payments and “rising costs for the management of Fiat paper/ metal money,” the Bank said.

In the report
Economic Times on Thursday also indicated that according to the RBI for 2018 cost of issue of banknotes amounted to nearly $90 million. RBI did not specify whether CBDC issued on the basis of the blockchain, however, the representatives of the Bank noted that the use of technology distributed registry (DLT) in payment and settlement solutions, “promises significant economic benefits in the future.”

Meanwhile, unlike a decision support DLT at the state level, the RBI has again toughened its stance against the cryptocurrency trade. In the report it is stated that now the transaction on purchase of cryptocurrencies are made directly between individuals after the ban
banking exchanges.

“It is necessary to monitor developments in this area because some traders can switch from running on the stock exchanges P2P-exchange that may also require increasing the circulation of cash,” warns the RBI. “Migration capabilities of cryptocurrency exchanges in the hidden pools of liquidity, their use of cash and moving offshore to areas of concern about compliance issues, AML/CFT and tax regime, therefore, require close attention”.

Since the ban on banking cryptocurrency exchanges initiated by the RBI entered into force in July, local stock exchanges looking for
new ways of generating income, including moving the business in a P2P trade.

The idea of issuing government digital currency is considered the various Central banks. Recently it became known that the Bank of Thailand is developing
cryptocurrency on the platform of R3 Corda, which will be used to facilitate interbank transactions and “improve the efficiency of financial markets infrastructure of Thailand”. The Bank of Spain also showed
support for the idea of the state of cryptocurrency.

In July, a Subcommittee of the U.S. Congress on monetary policy came to the conclusion that digital currency Central Bank – one of the worst financial ideas. This is also the opinion of the Central Bank of South Korea, whose representatives noted that crypto currencies Central banks are “subjective risk”.

However, it is believed that CBDC can seriously affect the future of the financial system, and not necessarily for the worse.

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