The Reserve Bank of India is looking into how it could go about bringing to life a Rupee-backed Central Bank Digital Currency (CBDC) to help curb the vast sums it spends from its annual budget to mint physical money.
Coinedict reported on 30th August that the Reserve Bank of India (RBI) had published its annual report on Wednesday. The report spoke of the inter-departmental unit that had been formed within the RBI to identify the ‘desirability and feasibility to introduce a central bank digital currency’.
In response to this news the best selling author and expert of all things cryptocurrency and blockchain,Andreas M. Antonopoulos tweeted a scathing criticism of the idea behind a centralised digital cash.
The Aadhaar system being referred to in the tweet above is a biometric identity framework that has been initiated by the Indian government with the sole purpose of tracking its citizenry via a 12-digit number. The system is the largest of its kind in the world with over 1.22 billion citizens biometric identification being constantly tracked.
Out of the blue in November 2016, the Indian government decided to roll out its controversial demonetization policy. According to the Reserve Bank of India (RBI), the demonetization policy was being enacted in order to eliminate instances of fraud and money laundering being conducted via cash. While these policies were being put into place, cryptocurrency exchanges were being banned across India by the RBI.
According to the annual report released on Wednesday by the RBI:
“Rapid changes in the landscape of the payments industry, along with factors such as the emergence of private digital tokens and the rising costs of managing fiat paper/metallic money, have led central banks around the world to explore the option of introducing fiat digital currencies… In India, an inter-departmental group has been constituted by the Reserve Bank to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency.”
This is not the first time the expert on Bitcoin and Blockchain has been critical of India’s stance on cryptocurrencies. On the 5th of April Andreas tweeted;
And then further went on to add,
India isn’t the first country to get behind the idea of a digital currency. Venezuela’s Petro, which is backed by the countries oil and mineral reserves have also been in the works for a while although many have come forward and expressed their doubts over the hype surrounding it.