During a recent roundtable event in Doha, Qatar, Union Minister of Commerce and Industry Piyush Goyal announced the imminent launch of a digital currency by India, which will be backed by the Reserve Bank of India (RBI). This groundbreaking initiative is designed to enhance financial transactions by making them faster, safer, and more transparent, while also promoting reduced reliance on paper currency.
Goyal explained that the digital currency would operate similarly to traditional currency, albeit in an electronic form. He emphasized that this development aligns with India’s vision of modernizing its financial infrastructure. “India has also announced that we’ll be coming out with a digital currency which will be backed by the Reserve Bank of India guarantee like normal currency,” he stated.
Drawing comparisons with “stable coins” introduced in the United States under the GENIUS Act, Goyal highlighted the advantages of the new digital currency system. He noted that it would facilitate transactions more efficiently, allowing for quicker processing times than current banking systems and minimizing paper use. “It will only make it easier to transact. It will also reduce the paper consumption and will be faster to transact than the banking system,” he explained.
The digital currency will utilize blockchain technology to ensure transparency and traceability of transactions. This feature is particularly important in combating illegal activities, as each transaction can be verified through the blockchain system.
While addressing the growing interest in cryptocurrencies, Goyal clarified India’s stance on these unregulated digital assets. He pointed out that although cryptocurrencies have not been banned in the country, the government does not actively promote their use due to the associated risks. “We have not been encouraging cryptocurrency, which does not have sovereign backing or which is not backed by assets,” he noted, warning about the uncertainties surrounding privately issued cryptocurrencies such as Bitcoin.
Goyal stressed that such cryptocurrencies operate without any official guarantees, adding, “There’s no backend guaranteeing any value.” To underscore the government’s position, he mentioned the heavy taxes imposed on cryptocurrencies, stating, “It’s a thing you can do at your own risk and cost. The government doesn’t encourage or discourage. We only tax it.”
The Minister reiterated that India’s forthcoming digital currency would differ fundamentally from private cryptocurrencies, as it would appear with the full backing of the Reserve Bank of India. This guarantees users a level of security and reliability, thereby maintaining the integrity of the financial system.
