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Why RBI thinks India should go for basic models of central bank digital currency

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3 years ago

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Why RBI thinks India should go for basic models of central bank digital currency

The Reserve Bank of India (RBI) said on Tuesday that, given its dynamic impact on microeconomic policies, India must initially adopt the basic model of a central bank’s digital currency.

The Reserve Bank of India stated in its report “India Banking Trends and Progress in 2020-21” that its basic form is central bank digital currency (CBDC), which provides a safe, robust and convenient alternative to physical cash. “Various design choices, it can also assume the complex form of financial instruments. Compared with the existing forms of currency, it can provide advantages in terms of liquidity, scalability, acceptance, the convenience of anonymous transactions, and faster settlement. Users provide benefits,” the Reserve Bank of India said

The Reserve Bank of India further added that global central banks are now considering how to implement digital currencies, moving forward from their initial exploratory attempts.

In this case, RBI believes that certain key issues related to the central bank’s digital currency design elements need to be resolved before it is introduced, for example, is CBDC universal, can it be used for retail purposes, or can it be used for wholesale purposes.

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In addition, in countries like India, the Reserve Bank of India stated that it needs to carefully weigh the decision on the issuance structure, that is, whether digital currencies are issued directly by the central bank or through commercial banks.

“Measuring the scale of the issuance, distribution will also help determine the appropriate basic technology best suited to handle this type of operation.

In view of its dynamic impact on the formulation of macroeconomic policies, it is necessary to initially adopt the basic model and conduct comprehensive tests to minimize its impact on monetary policy and the banking system. “

The Reserve Bank of India stated that India’s advances in payment systems will provide citizens and financial institutions with the most advanced CBDC to provide a useful pillar.

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RBI has been studying use cases and developing a phased implementation strategy to introduce CBDC with little or no interruption. Earlier this month, the Central Committee of the Reserve Bank of India discussed various aspects related to CBDC and private cryptocurrencies.

Parliament recently learned that the government had received a proposal from the Reserve Bank of India in October 2021 to amend the Reserve Bank of India Act of 1934 to expand the definition of “bank bill” to include currency in digital form.

Complete News Source : mint

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Oppn seeks probe into Adani charges in US: ‘Obvious protection of PM Modi’

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13 hours ago

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November 21, 2024

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Oppn seeks probe into Adani charges in US: ‘Obvious protection of PM Modi’

Following US SEC charges of bribery against Gautam Adani, opposition parties criticise PM Narendra Modi and call for a JPC investigation.

As billionaire Gautam Adani faces charges in the US for alleged bribery and fraud, the Opposition on Thursday intensified its attack on the Centre over its alleged links with the Adani Group.

Gautam Adani has been charged in the US with allegedly paying $250 million in bribes to Indian officials between 2020 and 2024 to secure favourable terms for solar energy contracts. The scheme, prosecutors said, could have earned Adani’s group over $25 billion in profits.

Congress demands JPC probe

Reacting to the charges, the Congress called for a Joint Parliamentary Committee (JPC) probe into alleged scams involving Adani’s conglomerate. The party also demanded the appointment of a “new and credible” Sebi chief to investigate Adani’s financial dealings and compliance with securities laws.

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ALSO READ- At 65.2%, Maharashtra records highest voter turnout since 1995 assembly election

Congress leader Jairam Ramesh said the US Securities and Exchange Commission’s (SEC) actions highlight the failure of Indian institutions to investigate the group. “The indictment vindicates Congress’s demand since January 2023 for a JPC into the Modani scams,” Ramesh wrote on X.

He accused Prime Minister Narendra Modi of shielding Adani and claimed Congress’s “Hum Adani Ke Hain Kaun” (HAHK) series had exposed the businessman’s alleged fraud and his ties with the PM.

The fact that it has taken a foreign jurisdiction to properly investigate Adani only shows how Indian institutions have been captured by the BJP, and how decades of institutional development have been undone by greedy and power hungry leaders, the Congress leader said in another post.

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“All of this is consistent with a long record of fraud and criminality carried out with impunity with the obvious protection of the Prime Minister,” Ramesh charged.

Other Oppn leaders join attack

Other opposition leaders joined the attack. Trinamool Congress MP Saket Gokhale questioned the BJP’s involvement in Adani’s dealings and demanded an independent judicial probe.

Aam Aadmi Party leader Sanjay Singh accused PM Modi of allowing Adani to tarnish India’s global reputation.

ALSO READ- Adani Group shares plunge after US SEC charges, Adani Green down 16%

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Adani stocks latest updates

The allegations rattled markets, with Adani Group stocks plunging. Adani Enterprises fell 20 per cent in pre-open trade, while shares of Adani Ports, Adani Green, Adani Power, and others dropped between 7 per cent and 18 per cent.

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