India's digital rupee will be powered by superior blockchain technology. India’s finance minister expressed confidence in how having a digital currency can help stimulate the country’s digital economy. Speaking on this, Nirmala Sitharaman said that "the introduction of a central bank digital currency will give a great boost to the digital economy. The digital currency will also lead to a more efficient and cheaper currency management system ”.
The latest announcement is a rather welcome move for the Indian crypto community which has been on edge for a long time. The formation of a CBDC also means that India will have clear and better crypto rules within the next financial year. Speaking to the lower house of India, Lok Sabha, Mos Finance stated that "the purpose of creating a digital currency is to provide significant benefits, such as reduced reliance on cash, greater seigniorage due to lower transaction costs”.
In addition, India's CBDC digital rupee will be "efficient, robust, reliable, regulated and a legal tender-based payment option," Mos Finance said. She also stated that the Ministry of Finance will also take care of the associated risks that come with it, weighing its potential benefits.
India's digital rupee move comes just at a time when other competing economies like China are already making bold moves for CBDC. China is working aggressively to bring its digital yuan into the Winter Olympics, however the spread of Omicron in the country casts a shadow over its plans. On the other hand, the US Federal Reserve has also closely studied the merits of having a central bank digital currency. However, they have not yet come to a firm decision on this.