India to Introduce Hybrid Crypto Regulation and RBI-Backed Digital Currency
India is set to introduce significant changes in its cryptocurrency landscape. The country is likely to adopt a hybrid regulatory framework for crypto issuers and will launch a digital currency backed by the Reserve Bank of India (RBI).
The new regulatory framework will combine monetary and securities oversight, a departure from the current taxation-heavy approach that doesn't outright ban unbacked cryptocurrencies. This move aims to create a clearer path for crypto issuers operating in India.
The RBI-backed digital currency, often referred to as a Central Bank Digital Currency (CBDC), is expected to simplify transactions, reduce paper consumption, and enable faster, traceable payments. The RBI has already tested this digital rupee in both retail and wholesale segments, indicating a level of preparedness for its launch.
Despite the potential benefits, the industry views CBDCs with skepticism. Some argue that they move away from the core thesis of cryptocurrencies, which is decentralization and independence from central authorities.
India's shift towards a hybrid regulatory framework and the introduction of an RBI-backed digital currency signal a significant evolution in the country's approach to cryptocurrencies. While the industry has reservations about CBDCs, these developments could help clarify the regulatory environment, potentially attracting back the crypto talents who have left due to uncertainty.
