India Plans RBI Digital Currency Launch While Dismissing Unbacked Cryptocurrencies

India will launch a new digital currency backed by the Reserve Bank of India. Commerce Minister Piyush Goyal made this announcement during his visit to Qatar. The minister stated the system will make transactions faster and more transparent than traditional banking.

reported the announcement came on Tuesday. The RBI also plans to launch a pilot program for deposit tokenization on Wednesday. RBI's chief general manager Suvendu Pati confirmed the deposit tokenization initiative.

The central bank will use its wholesale CBDC segment as the foundation for the pilot. Several domestic banks will participate in the deposit tokenization program. The digital currency will utilize blockchain technology to ensure transparency and curb illicit transactions.

Goyal criticized cryptocurrencies like Bitcoin during his announcement. He claimed such assets have "no back end guaranteeing any value." The minister said India has not banned crypto trading but does not encourage it either. "We only tax it," Goyal stated when discussing the government's crypto stance.

Why This Development Matters

India's digital currency push comes despite leading global crypto adoption. ranked India first in its 2025 Global Crypto Adoption Index. The country topped all subcategories including retail, DeFi, and institutional activity.

The announcement reflects India's attempt to balance innovation with control. The country imposes a 30% tax on crypto gains and a 1% tax deducted at source on transactions above ₹10,000. These remain among the world's strictest crypto tax regimes. reported the digital rupee reached ₹1,016 crore in circulation by March 2025.

The RBI's digital currency already has over five million users. Fintech firm Cred recently became the first non-bank company to distribute e-rupee wallets. We previously reported that governments worldwide are exploring Bitcoin reserves, with 15 US states pursuing similar legislation. India's approach differs by promoting state-controlled digital currency instead.

The government's dual strategy aims to capture digital finance benefits without compromising monetary stability. Officials want traceability and security that private cryptocurrencies cannot guarantee. The digital rupee functions similarly to stablecoins but carries sovereign backing.

Industry And Global Implications

India's stance creates a paradox in the global crypto landscape. The nation leads crypto adoption while simultaneously discouraging private digital assets. reported Asia-Pacific crypto transaction volume grew from $1.4 trillion to $2.36 trillion between June 2024 and June 2025.

Industry observers warn that regulatory uncertainty has created problems. An estimated 80-85% of India's top crypto talent has already relocated internationally. The bureaucratic stalemate stems from the absence of clear frameworks for private cryptocurrencies. Raj Kapoor from the India Blockchain Alliance said the government sees CBDC as core to its fintech strategy.

The RBI maintains a skeptical position on unregulated digital assets. The central bank has previously advocated for banning private cryptocurrencies altogether. Instead, officials promote the digital rupee as a regulated alternative. This creates challenges for crypto companies operating in India.

Bitcoin recently surpassed $126,000 according to Coinbase data. Yet India continues warning about risks from privately issued digital currencies. The RBI cites threats to investor safety and financial system stability. The central bank argues legitimizing crypto could make it systemic and harder to control.

The deposit tokenization pilot represents the next phase of India's CBDC program. The wholesale version launched in November 2022 for interbank settlements. The retail version followed in December 2022 for consumer transactions. Both pilots have seen adoption increases over the past year.

Global observers view India's approach as a test case for other emerging markets. The country must balance innovation against oversight while maintaining user trust. Questions remain about privacy versus surveillance in CBDC implementation and approved token classes. The success or failure of India's strategy will influence regulatory decisions worldwide.