India bet on the digital rupee and plans to launch it in the first quarter of 2023. The Indian government’s battle against crypto trading has proven that the national authority does not have the power to regulate the virtual industry.
The flow of people who use cryptos and base their commercial activities on the decentralized market is growing daily, making the idea of a total ban look further away. For this reason, the authority in India plans to change its ideals and bet on the digital rupee in the coming years.
In previous months the Indian parliament tried to ban Bitcoin, Tether USD, and Ethereum transactions but failed. Now they are looking to implement the digital rupee for the first quarter of 2023, as announced by the RBI.
The digital rupee is coming to India: what is it?
The central banking entity in India spoke about the digital rupee project linked to their national currency, the Indian rupee. Unlike the crypto market, it will be a significant authority-backed asset with free trading.
By 2018, India rejected crypto trading, pointing it out as a destabilizing, speculative, and volatile technology. Even to date, the regulators dared to say that people who traded with cryptos would have prison sentences of ten years. However, two years later, they had to lift the sanctions, although that resentment towards technology remains.
Regarding the digital rupee, its launch will be scheduled for the first quarter of 2023. This bank-backed token could be linked to the CBDC expected to launch in India in 2021, but no more is known about it.
Opportunities that the digital rupee will offer in India
The RBI offered more details about the digital rupee, revealing the opportunities that its technology will offer. According to the bank, it is a token that India will back, so its value will not be unstable. Likewise, the virtual rupee will have fast transactions, and its operating costs will be low.
Although the crypto project looks genuine for India, the possible disadvantages that the technology brings must also be considered. The virtual rupee could have poor adaptability to the Blockchain network, leading to more problems.
It is not known if this token in India will serve to develop a new financial framework or will only be an alternative for citizens to move away from decentralized currencies such as Ethereum. The parliamentarians agree with this development claiming that the country needed to be renewed.
However, there would also be trade enthusiasts who feel uneasy about the growth of regulations towards the virtual market. We will have to wait for the implementation of the central token in India and see how it works.