The Lok Sabha, the lower house of India’s parliament, recently unveiled its intention to curb private cryptomoney, such as Bitcoin or Ether, to promote its own digital central bank money (DCBM). After China, India could therefore be the next major country to launch its own digital currency, a subject that covers many issues for the world’s governments.
India wants its own MNBC
In March 2020, the Supreme Court overturned the Reserve Bank of India’s ban on encryption. The Reserve Bank of India (RBI) has been fighting for several years to have private cryptomoney banned. In April 2018, the Reserve Bank of India had decided to ban banks from offering cryptomoney services. A thunderbolt for local players in the industry. The decision was rejected a few months later by the Supreme Court.
Today, TechCrunch tells us that India wants to introduce a digital central bank currency in the coming months. In support of its arguments against cryptomoney, RBI points to the risks of money laundering and other illegal activities made possible by the circulation of private cryptomoney. This time the Indian Parliament could intervene to ban all private cryptomoney in the country, according to sources close to the issue.
A way to better control trade?
Instead, Parliament would like to establish, like China, a digital central bank currency to be issued by the Reserve Bank of India. If the country wishes to develop its own digital currency, it is obviously to better control financial exchanges. Indian Prime Minister Narendra Modi is logically in line with the policy unveiled by Members of Parliament. He believes that the creation of an MNBC would be an opportunity for India.
In 2021, more than 700 million Indian citizens will own a smartphone. This is a necessary condition for deploying a digital central bank currency. As in China, this MNBC project already has a large base of potential users. The country wants to improve the traceability of exchanges and thus increase its revenues by collecting more taxes. Further north, the government of Xi Jinping has already set up the first digital yuan distributors. The cities of Beijing, Shanghai and Guangdong province have committed to testing this digital currency in 2021.