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Digital rupee set for 2023 launch, says Nirmala Sitharaman

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Digital rupee set for 2023 launch, says Nirmala Sitharaman

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The government and RBI are eying the many commercial uses of CBDCs, much beyond financial inclusion, the finance minister said, while speaking at a FICCI event.

Digital rupee set for 2023 launch, says Nirmala Sitharaman

The Centre and the Reserve Bank of India (RBI) are looking to launch the proposed central bank digital currency (CBDC) in 2023 and use it beyond financial inclusion, Finance Minister Nirmala Sitharaman said at an event in California.

“The government and RBI are looking at many of its commercial use objectives and not just financial inclusion, which is largely achieved through the JAM trinity,” The Times of India quoted Sitharaman as saying at an event organised by the Federation of Indian Chambers of Commerce & Industry (FICCI) and US-India Strategic Partnership Forum (USISPF).

Last year, the minister had said the Jan Dhan-Aadhaar-Mobile (JAM) trinity had helped reach out to citizens across India during the COVID-19 pandemic. According to her, the JAM trinity catapulted the country’s banking sector to a different level by bringing the financially excluded under its ambit, saving pilferage and disbursing government benefits to genuine beneficiaries, PTI reported.

In her Budget speech this year, Sitharaman had announced that the RBI would launch its own digital rupee in the financial year 2022-23. The digital rupee, which would be a CBDC, would significantly boost the digital economy.

As per the RBI, the CBDC is the same as the currency of the country issued by the central bank but in a different form than paper. The digital token would fulfil the basic functions of a currency as a medium of exchange, unit of account, store of value, and standard of deferred payment.

At present, the RBI is working on the pilots for both wholesale and retail components, which are likely to start in the next few months.

At the same time, the finance minister said the government would take a more nuanced view of cryptocurrencies, reiterating its possible use in money laundering and terror financing activities. 

The decision over cryptocurrencies cannot be rushed, Sitharaman said, given that the government has to make sure that “with the least amount of information available, we’re making the appropriate decisions.”

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