India has reiterated its cautious stance toward cryptocurrencies such as Bitcoin while announcing fresh plans for a Reserve Bank of India (RBI)-backed digital currency. The move reflects the country’s preference for sovereign-backed digital solutions over unregulated crypto assets.
Government Unveils RBI-Backed Digital Currency Plan
Commerce Minister Piyush Goyal revealed that India will soon introduce a digital currency supported by the RBI. Speaking at a roundtable during his visit to Qatar, Goyal said the initiative aims to make financial transactions faster, simpler, and more transparent compared with traditional banking methods.
According to a report by The Hindu, the RBI will launch a pilot project on deposit tokenisation on Wednesday. Suvendu Pati, the RBI’s Chief General Manager in the fintech department, confirmed the development, noting that the pilot will involve several domestic banks. The central bank plans to use the wholesale version of its central bank digital currency (CBDC) as the foundation for the experiment, Reuters reported.
Not a Stablecoin, Not a Traditional CBDC
Goyal clarified that the forthcoming RBI-backed project is distinct from stablecoins and conventional CBDCs. The system, he said, is intended to improve the efficiency of financial transactions while maintaining the transparency of blockchain technology.
“It will only make it easier to transact. It will also reduce paper consumption and will be faster to transact than the banking system,” Goyal said. He added that blockchain integration will ensure traceability and help curb illicit activities.
Cautious Approach to Cryptocurrencies
While presenting the RBI’s digital initiative, Goyal reiterated the government’s scepticism toward private cryptocurrencies such as Bitcoin, which recently hit a new record above $126,000 on Coinbase. He described such assets as lacking any backing or intrinsic value.
“We have not been encouraging cryptocurrency which does not have sovereign backing or which is not backed by assets,” Goyal said. He emphasised that cryptocurrency trading remains legal in India but operates at investors’ own risk. “Suppose tomorrow there’s no buyer, there’s nobody to guarantee. It’s a thing you can do at your own risk and cost. The government doesn’t encourage or discourage. We only tax it,” he added.
India’s Longstanding Crypto Skepticism
The RBI has maintained a cautious stance on digital assets for years, frequently debating whether to impose an outright ban on cryptocurrency transactions. Despite its reservations, the central bank launched a wholesale CBDC pilot, known as the digital rupee, in late 2022. The project aimed to enhance interbank settlements and lower transaction costs in the financial sector.
The new digital currency initiative and tokenization pilot mark the next phase in India’s effort to develop a regulated, blockchain-based financial ecosystem. The government hopes such systems will balance technological innovation with financial stability and oversight.
The RBI had not issued an official comment on the latest developments at the time of publication.
