RBI Annual Report: India Would Implement CBDC in a Tiered Manner

Indian finance minister Nirmala Sitharaman mentioned the launch of a digital currency in February when addressing the budget for 2022. She said it would give the digital sector a "huge boost." RBI revealed evaluating the benefits and drawbacks of adopting a CBDC in its annual report released on Friday.

The RBI underlined in the study that India's CBDC must adhere to the country's goals in terms of "monetary policy, financial stability, and efficient operations of currency and payment systems."

Based on this need, RBI is currently exploring the various design features of a CBDC that can co-exist with the existing fiat system without causing disruptions. The Indian Finance Bill 2022, which mandated a 30% crypto tax on unrealized gains, also establishes a legislative basis for the creation of a digital rupee: "The Reserve Bank proposes adopting a graded approach to introducing CBDC, going step by step through stages of Proof of Concept, pilots and the launch." RBI is validating the feasibility and functioning of introducing a CBDC halfway through 2022 at the proof of concept stage.