India will get its very own official digital currency soon. According to a top government source, it will mirror any of the presently available private firm-operated electronic wallets, but with a twist that it will be a sovereign-supported facility. In her budget speech the previous week, Finance Minister Nirmala Sitharaman discussed launching a central bank-backed ‘digital rupee’ soon.
As per the source, the digital currency issued by the Reserve Bank of India would be numbered in units, similar to every fiat currency having a unique number. The units issued in the digital rupee would be added to the currency in circulation. It wouldn’t be very different from fiat currency. It would be more like an electronic kind of fiat currency, so in a sense, it would be a government-mandated electronic wallet.
Being developed by the RBI, the digital rupee blockchain would be capable of tracking all transactions, unlike the present system of mobile wallets provided by private firms. The Reserve Bank of India has hinted that the digital rupee would be ready by the end of the next financial year.
Furthermore, using electronic wallets provided by private firms, people lately transfer money to the private firm who holds the money on her/his behalf and pays to a dealer upon any transaction.