Digital Currency

RBI has expressed positivity towards introducing a graded approach to adopt Central Bank Digital Currency (CBDC). It stated that the CBDC will be introduced in conformity with the objectives of the monetary policy, financial stability and efficient operations of currency and payments systems. Currently, the RBI is reportedly studying the design elements of CBDC after evaluating the pros and cons of introducing such a thing in India.

In an attempt to digitise the Indian Rupee, India is likely to start the first digital currency trail programmes by the end of 2021, said the RBI's governor Shaktikanta Das. The currency is basically the digital version of hard currency and would be called central bank digital currencies. Under the trial, the RBI will study various aspects such as its security, impact on the financial sector, and Monetary policy.

Illegal activities like terror funding and money laundering have become rampant in the era of cryptocurrency. “Pattern and sources of financing have undergone a massive shift due to pandemic-related stress. This has made it very difficult for authorities to track... inflow of money,” said BK Singh, a retired Joint Commissioner, Delhi Police. IMF stressed the dangers of such activities taking place that may adversely affect countries.