On 23 November 2021, the Government of India announced its plan to regulate digital assets through the proposed Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. The bill will be discussed during the winter session of parliament. It proposes to block certain private cryptocurrencies and create a framework for a digital currency issued by the Reserve Bank of India.
India will soon join a growing list of countries responding to the emerging crypto market with central bank digital currencies (CBDCs). Here are four others:
China started creating a national digital currency in 2014. It is a digital version of the yuan and will be issued by the People’s Bank of China. Aimed at making payments more efficient and curbing illicit activity, it will be treated as legal tender and no interest will be paid on it. China is running real world trials of this digital currency. As of October 2021, around 140 million people had opened wallets for the digital yuan. Sixty-two billion yuan had been transacted until last month.
Nigeria is the world’s second-largest cryptocurrency market and the first African nation to pilot its own CBDC. The eNaira will be issued by the Central Bank of Nigeria and has been in development for three years. It aims to provide a more cost-efficient alternative to hard cash, provide unbanked individuals with better access to money and curb illegal activities.
The e-krona is being developed by the Riksbank, the central bank of Sweden. The timeline for its rollout is currently unknown. Next November, the Swedish parliament will conduct an inquiry into the role of the state in the payments market. Details about its launch will be clearer then. However, the currency is currently being tested in phases. The role of e-krona will be to supplement physical cash and help the national currency stay relevant.
In June 2021, Russia launched a pilot of the digital ruble, in collaboration with twelve banks. The Bank of Russia recently announced the CBDC is one of its key projects in digitalisation until 2030. Its stated goal is to enhance Russia’s payments infrastructure, stimulate competition and ensure affordable financial services to individuals and businesses.
These developments will have a huge impact on the nature of payments in the years to come. As India joins the ranks of countries developing their own digital currencies, we expect exciting times ahead.
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