No plans to launch cryptocurrencies, government says

RBI is currently working on a phased implementation strategy for CBDC adoption and is exploring use cases that could be implemented with little or no disruption: MoS Finance

RBI is currently working on a phased implementation strategy for CBDC adoption and is exploring use cases that could be implemented with little or no disruption: MoS Finance

The government has no plans to launch cryptocurrencies, Minister of State for Finance Pankaj Chaudhary told the Rajya Sabha on Tuesday.

Currently, cryptocurrencies are not regulated in India, he said in a written response.

“RBI does not issue cryptocurrency. Traditional paper currency is legal tender and is issued by the RBI under the terms of the RBI Act 1994. A digital version of traditional paper currency is called Central Bank Digital Currency (CBDC),” he said.

RBI is currently working on a phased implementation strategy for CBDC adoption and is evaluating use cases that could be implemented with little or no disruption, he said in another answer.

The adoption of CBDC has the potential to provide significant benefits such as: B. less dependency on cash, higher seigniorage due to lower transaction costs, etc., he added.

Banknote printing has declined over time, he said, adding that £4,378 million worth of banknotes were printed in 2019-20, down to £4,012 million in 2020-21.

In response to another question, he said the country’s financial health has many facets.

“A stable stock market together with a well-functioning and sophisticated market infrastructure is an indicator for assessing a country’s financial health. Equity markets are an indicator of medium to long-term economic growth as stock prices reflect the market’s expectations of future corporate earnings/profitability and hence the underlying confidence in the economy,” he said.

In the short term, however, stock markets would be mainly driven by economic and geopolitical events.

Exchanges collect exchange transaction fees from the broker, which can be passed on to customers, he said, adding that the transaction fee is mentioned in the contract note issued by the broker to the customer.

The taxes levied on the sale and purchase of stocks, including taxes levied by exchanges, are detailed in the final note that the broker issues to clients at the end of each trading day, he said.

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