CBDC It can completely replace private virtual currencies, including Bitcoin. This was expressed by T. Rabi Sankar, Deputy Governor of the Reserve Bank of India, writes Outlook.

The comment came after the Ministry of Finance released a report on cryptocurrencies.

T. Rabi Sankar talked about the regulator’s “methodical work” on the digital rupee launch. The CBDC will enable better management of the national currency, reduce settlement risks in the interbank system and become the best alternative for cross-border payments.

He stressed that the Central Bank is approaching this initiative with a “weight”, given the possible negative impact on the banking system by limiting the ability of credit institutions to attract deposits and their role in the implementation of monetary policy.

“We will go through a proof-of-concept process, followed by pilot projects and phased implementation. We aim to learn along the way. The digital journey can go on forever.” explained.

Sankar disagreed with other countries’ Central Bank’s position advocating the adoption of stablecoins.

“I’m sure now [послекраха Terra USD] they understand the difference between money and currency”said the official.

Central Bank Deputy Governor warned IMF To take a leading role in defining the CBDC and cryptocurrencies related position.

The regulator is a consistent competitor of digital assets. In 2018, the Central Bank banned banks and financial institutions from providing services to companies working with cryptocurrencies. In March 2020, the Supreme Court overturned the restriction.

In May 2021, it was learned that the country’s Central Bank had asked banks to end their relationship with bitcoin exchanges. After that, the regulator urged controlled institutions not to refer to the repealed directive banning transactions with cryptocurrencies.

Recall that the Reserve Bank of India began exploring the potential of the digital rupee in early 2021.