India is pushing ahead with a move to create a digital cashless economy, with the government planning to allow the circulation of a digital version of the Indian rupee in 2020.
Sources in the government said a new electronic currency could be launched as soon as the end of the financial year, and that it would be pegged to the rupee, but not pegged to gold or gold-backed notes.
The Reserve Bank of India (RBI) has previously said it was willing to let the country use its own digital currency, and its Deputy Governor Anurag Saxena said on Wednesday that he expects it will be a digital-only currency.
However, some economists are sceptical about the rupees potential to be accepted as a medium of exchange, as they tend to be volatile and prone to volatility in terms of exchange rate.
According to one report, the Indian central bank could also consider issuing gold-based currencies as well.
This comes as China, a major currency exporter, is pushing for a digital digital currency as part of its plans to compete with the US and other major economies for the global currency market.
According, in December the People’s Bank of China (PBOC) launched the first “digital currency” to be issued in the world, which was the People�s Bank of Taiwan (PBOT) bitcoin.
The PBOC also launched its first digital-backed banknote in 2018, and the first banknotes to be printed with gold in 2020 were also issued.
The RBI’s digital currency proposal has been criticised as a move that will put pressure on India’s banks and financial institutions to introduce more digital payment technologies in order to comply with regulations in the country.
India has been one of the few nations where the government has not issued a currency for more than five years.
