India has been working on introducing its own digital currency backed by the Reserve Bank of India (RBI) guarantee, similar to regular currency.
The move comes as part of the country’s efforts to integrate blockchain technology into its financial ecosystem. Announced by the Union Minister of Commerce and Industry, the initiative focuses on making transactions more efficient, safer, and more transparent, thus improving the overall financial space in India.
Representatives added that the system, like stablecoins regulated in the US under the GENIUS Act, is set to operate under complete government backing. Also, every transaction under the new digital currency will be verifiable, minimising the potential for illegal or untraceable transfers.
India’s view on crypto
Even if India is among the world’s most crypto-active regions, the country’s government and central bank maintain a cautious attitude toward privately issued digital currencies, such as Bitcoin. The Union Minister of Commerce and Industry highlighted this, saying that the country has not been encouraging cryptocurrency, which does not have sovereign backing or is not backed by assets.
Furthermore, before this initiative, the RBI had issued warnings about the potential risks associated with unregulated digital assets and their effect on the financial system, mentioning threats to investor safety. The central bank continues to support a blanket ban on private cryptocurrencies. As an alternative, the RBI promotes its own Central Bank Digital Currency (CBDC) as a regulated option.
Recently, India has centred its efforts on cracking down on crypto activities, despite still not having a comprehensive regulatory framework. A report underlined that the country’s regulators are wary of legitimising crypto, which could, in turn, lead to making it systemic and harder to control. Thus, regulators have no plans in the near future to regulate this specific sector and instead let it remain confined within strict tax and Anti-Money Laundering (AML) requirements.
