The Reserve Bank of India has promised to amend the RBI Act, 1934, in order to include digital currency under the definition of a bank note, the Bharatiya Janata Party-led Union government told the Parliament on Monday, 29 November, reported NDTV.
"The RBI has been examining use cases and working out a phased implementation strategy for introduction of Central Bank Digital Currency (CBDC) with little or no disruption," the Minister of State for Finance submitted in a written reply to the Lok Sabha.
However, the Finance Ministry also acknowledged that "there are also associated risks which need to be carefully evaluated against the potential benefits."
The ministry's note comes in the backdrop of the union government's recent announcement to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill that intends to ban private cryptocurrencies, the details of which are explained here.
Finance Minister Nirmala Sitharaman has also notified the Parliament that the BJP government has no plans whatsoever to recognise Bitcoin as an official form of Indian currency and that the central government has not collected any data on Bitcoin transactions in the country.
The government reportedly only wants certain cryptocurrencies circulating within the economy with the intention to promote the underlying technology, according to the the Parliament winter session's legislative agenda, Mint reported.
Earlier this month, Prime Minister Narendra Modi had stated that "it is important that all democratic nations work together on this and ensure it does not end up in wrong hands, which can spoil our youth", as quoted in Business Standard.
(With inputs from NDTV, Mint, and Business Standard)