The Reserve Bank of India’s upcoming digital currency, which will use a private blockchain platform, will reduce the transaction settlement processes. The digital currency will be like cash and give the central bank tighter control over it. “RBI-issued digital currency will be exactly like cash and it does not need intermediate settlements and multiple hops,” Mint reported a source as saying.
Last month, RBI Governor Shaktikanta Das had said that RBI has reservations regarding cryptocurrencies and it is working on its own digital currency. The digital currency, Das said, will be different from cryptocurrencies, adding that the central bank does not want to be left behind in technological revolution and the benefits of blockchain technology need to be capitalised.
RBI’s private blockchain platform will be like the Unified Payments Interface (UPI) on which government and private companies can build their own apps. While there have been initial discussions on the issue, the final decision to start the work on it hasn’t been taken yet.
The central bank wants to have complete control over the digital currency, the publication quoted another source as saying. “RBI didn’t want a distributed ledger like bitcoin, which uses public blockchain. RBI is essentially interested in possibilities and applications in fraud prevention, counterfeiting and some of the specific benefits of blockchain,” the source said.