India prepares RBI digital token as officials question crypto value

India is moving forward with a Reserve Bank of India (RBI)-backed digital currency initiative while reiterating scepticism toward unregulated cryptocurrencies such as Bitcoin.

According to The Hindu, Commerce Minister Piyush Goyal announced the upcoming launch of a digital currency supported by the RBI during a roundtable discussion in Qatar.

The minister explained that the project aims to enhance transaction speed and transparency while reducing reliance on paper-based systems.

“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 stated.

He added that the new digital framework will be built on blockchain technology to ensure accountability and minimise illicit financial activities.

The digital currency, however, will differ from both stablecoins and the existing central bank digital currency (CBDC) pilot.

Goyal clarified that this project will operate under direct RBI oversight, allowing smoother transactions without private crypto involvement.

In a related development, Suvendu Pati, the RBI’s chief general manager of the fintech department, said the central bank is preparing to begin a pilot on deposit tokenisation.

According to Reuters, the program will use India’s wholesale CBDC as the base infrastructure and will involve several domestic banks in the early testing phase.

“We have not been encouraging cryptocurrency which does not have sovereign backing or which is not backed by assets,” said Goyal, also commenting on the government’s broader stance on digital assets.

He further noted that India neither promotes nor prohibits cryptocurrency trading but treats it as a taxable activity.

“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,” the minister said.