RBI working on phased implementation of digital currency: Minister

"Introduction of CBDC (Central Bank Digital Currency) has the potential to provide significant benefits such as, reduced dependency on cash, higher seigniorage due to lower transaction costs, etc," the Minister said.

A CBDC is the legal tender issued by the central bank of a country in a digital form as a medium of exchange, store of value and unit of account.

The government has said that RBI will come out with digital currency in the coming financial year 2022-23.

Presenting Budget 2022, Finance Minister Nirmala Sitharaman had last month said that introduction of CBDC will give a big boost to digital economy.

"Digital currency will also lead to a more efficient and cheaper currency management system. It is, therefore, proposed to introduce Digital Rupee, using blockchain and other technologies, to be issued by the Reserve Bank of India starting 2022-23," she had said.

Consultancy firm Deloitte in a report earlier said that Central Bank Digital Currencies (CBDCs) are likely to play a pivotal role in shaping the future of value transfer.

"Most central banks worldwide are now in various stages of their evaluation of launching their national digital currencies," it said in a report.