The Reserve Bank of India (RBI) is actively working on creating a digital currency and will take a decision very soon, the central bank has reportedly confirmed. Meanwhile, payments giant Paypal is closing its payment services in India.

RBI at Rs.numerical reference

As the Indian government prepares to introduce the Crypto-Currency Bill, which will ban cryptocurrencies and also create a regulatory framework for the issuance of digital rupees, the central bank RBI has made its announcement.

RBI deputy governor B.P. Kanungo said on Friday:

An internal committee is currently looking into the matter to decide on the model of the central bank’s digital currency. The Reserve Bank will brief you on it very soon.

RBI Governor Shaktikanta Das also spoke about digital currencies on Friday. As for digital currency, I think we have already published our document, he told reporters. Our document on digital payments states that digital currency works with RBI.

The RBI governor was probably referring to the Payment Systems Booklet issued by the central bank last week. In the document, the RBI acknowledges that cryptocurrencies have gained popularity in recent years and says it is exploring whether there is a need for a digital version of fiat currency and, if so, how it can be made operational.

Entry to the Indian domestic payments market

Another change in the Indian payments market is the departure of global payments giant Paypal, which has announced it will discontinue its domestic services in India. On Friday, Hindu Business Line reported that Paypal’s decision comes at a time when digital transactions are breaking new records every month.

A spokesman for Paypal said: From 1. In April 2021, we will focus all our attention on getting more international sales for Indian companies and will shift our focus from our domestic products in India, he added:

This means that from 1. April will no longer offer domestic payment services in India.

The San Jose, California-based company began its domestic operations in India in 2017 and its problems with the RBI began in 2011 when the central bank asked the company to comply with the Foreign Exchange Management Act 1999, according to reports.

Paypal was preparing to launch its UPI platform when the National Payments Corporation of India (NPCI) introduced a new set of rules in November last year. The rule stipulates that third-party applications offering UPI payment services must use UPI starting at 1. By January 2021, it will be able to handle up to 30% of transaction volumes, the news portal said, suggesting that this appears to have been the culmination of Paypal’s plans for India.

Do you think the RBI should issue a digital currency? Let us know your comments in the section below.

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