Central bank digital currency seen rolling out this year: Finance minister Nirmala Sitharaman

Finance Minister NIrmala Sitharaman | Illustration: Moneycontrol

The government expects the Reserve Bank of India (RBI) to bring out its digital currency this year, Finance Minister Nirmala Sitharaman has said.

"We have had a lot of consultation with RBI over digital currency. We would like them to design it the way they would  like do it. But this year, we expect the currency to come out from the central bank itself," she added on March 8 at the India Global Forum 2022 in Bengaluru.

The Finance Bill, 2022 proposed that a Central Bank Digital Currency (CBDC) "should also be regarded as bank notes". In the post-policy press briefing on February 8, RBI Deputy Governor T Rabi Sankar had said the central bank had been working on a CBDC for the last two years. The next step, Sankar had said, was to conduct pilot projects and proofs of concept.

Expanding on the need for a CBDC, Sitharaman said at the India Global Forum that the government saw "clear advantages" of a central bank-driven digital currency.

"In this day and age, bulk payments happening between countries, large transactions between institutions, large transactions between central banks themselves of each country are all better enabled with a digital currency. Therefore we think the RBI would be looking to see how best they can come out with it," the minister said.