Digital Banknote to be Launched by RBI Soon; Know Everything About Paperless Currency
File image of the Reserve Bank of India | (Photo Credits: PTI)

New Delhi, December 4: The Reserve Bank of India (RBI) is likely to launch digital banknote soon in the country. The RBI constituted an inter-departmental group to explore the feasibility of introducing a rupee-backed digital currency. The committee has reportedly recommended the introduction of digital banknotes.

According to a report, if the recommendations get a green signal from the RBI, digital currency will be issued by the central bank. Digital banknotes could be saved in a mobile wallet or bank account. The circulation of the digital currency will be kept confidential. The RBI will be only authorised body to issue digital banknotes.

The committee recommended that two types of digital banknotes can be introduced; one on which no interest will be given and its value will remain the same, and second on which interest will be given. It also said the government will have to amend the Coin Act and the RBI Act to launch digital banknotes.

"(Globally) the rising costs of managing fiat paper/metallic money, have led central banks around the world to explore the option of introducing fiat digital currencies," the RBI had said in August while explaining the need for a centrally backed digital asset.

For the financial year 2018, the total cost of printing paper notes in India was Rs 636 crore, according to an RTI response.