RBI should issue digital currency in India

RBI is being entrusted to issue currency under the RBI Act 1934, section 22. Generally RBI issues coins and printed notes. However, there is an ambiguity to issue digital currency on the same legislative power. Description of authority, limit of transaction, security features and else are several serious issues regarding this.

Digital currency or the Block-chain method is immediately required to introduce in India. Indian Judiciary works slowest in comparison to other Judicial services of the World. Therefore, fraudsters utilize loopholes of judicial machinery and used to draw billions. In the current system of Economy, people perform their fraud game; however the detection can be performed after years. Henceforth, the current system indigenously provides a platform to the fraudsters to perform a game with the public money as well as pay time to settle a new destination until the case is being reported in media.

Another burning issue is that the cost of printing notes has been doubled, according to data released by RBI, 7965 crore in FY’17 from 3421 crore in FY’16 which is the post note-ban scenario. RBI has to deal with counterfeiting currency throughout the year mostly in porous border area. as per PTI, RBI says 7.62 lakh pieces of counterfeited currencies detected in FY’17 as in 6.32 lakhs in Fy’16.

The cost of transaction is also a serious issue. According to SBI, transaction up to Rs 10,000 is Rs 2.50 plus GST in bank branch, however, Rs 1.00 plus GST in internet banking.

Let us discuss the details of Block-chain technology. This is an algorithm of digital transaction. A user who has an account in Block-chain can precede a transaction cash and kind. This technology can be incorporated in land purchase, logistics, management, transport, power sector, currency transaction and all rest departments which has not yet been included. The advantage is, a single transaction get updated to all the rest servers simultaneously whether it may be land deeds or payment of power consumption bill. This technology minimizes the option for fraudsters to perform and make always alert to next servers. It is true that the update may take time several hours; however the process is solely transparent.

This paradigm shift concept is slowly making an impact to the world. US worried about ‘governance and risk management will be critical’. Europe posed no threat to central banks’ monopoly on money. Peoples’ Bank of China believes ‘conditions are ripe’ for it to embrace technology. Bank of Japan wants to study more about the crypto-currency. Bundesbank concerns about ‘more of a speculative plaything than a form of payment’. Bank of England is cited about crypto-currencies as a part of potential ‘revolution’ in finance. Bank of France concern about ‘those who use Bitcoin today do so at their own risk’. In India, using crypto-currency is violation of foreign exchange rules. Central Bank of Brazil concerns about ‘no immediate risk for the Brazilian financial system’. Bank of Canada thinks ‘This is really an asset, or a security, and so it should be treated that way’.

The innovation should have to emphasized with security features so that, it should be abandoned for any evil purpose. Time should pay attention to the nations, when they feel free, can take up the concept and implement as well. The new algorithm definitely deserves to replace the old process to make more transparent transaction. [Information taken from RBI site, ET News, India Today etc.]