India to Introduce RBI-Backed Digital Currency For Faster Transactions: Report

What to know:

• India is set to launch a digital currency backed by the Reserve Bank of India for seamless and secure transactions, according to Union Minister Piyush Goyal.
• The new digital currency will utilize blockchain technology to ensure faster and more transparent transactions, similar to stablecoins in the U.S.
• India's government remains cautious about cryptocurrencies not backed by sovereign, such as bitcoin.

India will soon launch its own digital currency backed by the Reserve Bank of India (RBI) for seamless transactions, Union Minister of Commerce and Industry Piyush Goyal said during a roundtable in Doha, Qatar.

"India has also announced that we'll be coming out with a digital currency which will be backed by the Reserve Bank of India guarantee like normal currency," Goyal said, according to local media reports.

He explained that the new system, leveraging blockchain technology, will enable faster, safer and transparent transactions, drawing parallels with stablecoins legalized in the U.S. under the GENUIS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act).

It will help in curbing illegal transactions, as every digital transaction can be verified through the system, he explained.

India, the world's fastest-growing major economy and home to over a billion people, supposedly outranks every other economy in crypto adoption, according to Chainalysis. Yet the Narendra Modi-led Indian government has been cautious and somewhat reluctant toward officially embracing crypto.

"We have not been encouraging cryptocurrency, which does not have sovereign backing or which is not backed by assets," Goyal said, noting the risks associated with unregulated digital assets.

He explained that privately issued cryptocurrencies, like bitcoin, operate without any official guarantee of value.