RBI is currently working towards a phased implementation strategy for the introduction of CBDC and examining use cases that could be implemented with little or no disruption, Chaudhary said
Highlights
- MoS Finance Pankaj Chaudhary stated that there is no plan to introduce cryptocurrency in India
- CBDC has the potential to provide significant benefits such as reduced dependency on cash
- The financial health of the country includes many facets, Chaudhary stated.
There is no plan to introduce cryptocurrency by the government, Minister of State for Finance Pankaj Chaudhary informed the Rajya Sabha on Tuesday. Currently, cryptocurrencies are unregulated in India, he said in a written reply.
"RBI does not issue a cryptocurrency. Traditional paper currency is a legal tender and is issued by RBI in terms of provisions of RBI Act, 1994. A digital version of traditional paper currency is called Central Bank Digital Currency (CBDC)," he said. RBI is currently working towards a phased implementation strategy for the introduction of CBDC and examining use cases that could be implemented with little or no disruption, he said in another reply.
The introduction of CBDC has the potential to provide significant benefits such as reduced dependency on cash, higher seigniorage due to lower transaction costs, etc, he added. Printing of notes has declined over a period of time, he said, adding, during 2019-20 notes worth Rs 4,378 crore were printed which came down to Rs 4,012 crore in 2020-21.
Replying to another question, he said, the financial health of the country includes many facets. "Stable stock market along with well-functioning and sophisticated market infrastructure is one indicator to assess a country’s financial health. The stock markets are indicative of economic growth in the medium to long term as the stock prices reflect the market’s expectation on future corporate earnings/profitability and hence the underlying confidence in the economy," he said. However, he said, in the short run, the stock markets are mostly driven by economic and geopolitical events.
Exchanges levy exchange transaction fees upon the broker which may be passed down to clients, he said, adding, the transaction fee is mentioned in the contract note issued to the client by the broker. The taxes levied on the sale and purchase of stocks including the taxes levied by exchanges are mentioned in the contract note issued to clients at the end of each day of trading by the broker, he said.
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