The Reserve Bank of India has “shelved” plans to develop its own central bank cryptocurrency, according to a January 1 report from Indian news outlet the Hindu Business Line. Last April, central bank officials created an interdepartmental group to study the feasibility of creating a central bank digital currency (CBDC) backed by the rupee.
The Hindu Business Line report cited an unnamed source who reportedly said:
“The government doesn’t want the digital currency any more. It thinks it is too early to even think about a digital currency.”
Indian regulators’ interest in a possible CBDC was primarily motivated by cryptocurrency’s potential for addressing money-laundering, cyber-security, and black money concerns.
The news comes amid other media reports suggesting that the Indian government’s position on cryptocurrency is in somewhat of a holding pattern. The Ministry of Finance recently responded to questions from the lower house of parliament. In its answers to those questions, the Ministry acknowledge that it was still studying the issue, with “due caution.”
In addition, the government reaffirmed its position that digital currencies are not legal tender, while noting that an inter-ministerial committee is evaluating whether to officially permit crypto trading. Other issues, like licensing schemes for crypto entities, are also being considered, as the committee continues to examine “all issues, including the pros and cons of the introduction of an official digital currency in India.”