Parliamentary panel reviews RBI's digital rupee, crypto challenges

The Parliamentary finance committee reviewed India's CBDC, the digital rupee, with RBI and ICAI officials. Discussions focused on its slow adoption compared to private assets and the regulatory challenges posed by virtual digital assets (VDAs).

The Parliamentary Standing Committee on Finance on Thursday held an extensive review meeting with officials of the Reserve Bank of India (RBI) and representatives of the Institute of Chartered Accountants of India (ICAI) to assess the progress of India's Central Bank Digital Currency (CBDC), popularly known as the digital rupee They also examinined the broader regulatory and operational landscape surrounding virtual digital assets (VDAs).

The meeting assumes significance at a time when India is attempting to strike a balance between encouraging financial innovation and maintaining monetary and financial stability. While the RBI has been steadily expanding pilot projects for its sovereign digital currency, privately issued cryptocurrencies and other virtual digital assets continue to pose regulatory, taxation and enforcement challenges.

Committee's Ongoing Examination

Speaking to ANI after the meeting, Bhartruhari Mahtab, Chairman of the Parliamentary Standing Committee on Finance, said the discussions formed part of the committee's continuing examination of the country's digital asset ecosystem. "This meeting was on virtual digital assets. This is the seventh meeting that we are having today. And the RBI had come, and they gave their own view relating to virtual digital assets," Mahtab said.

Understanding Practical Challenges

According to the Chairman, the committee also interacted with the Institute of Chartered Accountants of India to understand the practical challenges faced by accounting professionals and auditors in dealing with digital assets under India's existing legal and taxation framework. "And subsequently we had a meeting with the Chartered Accountant Association of India. And they have been auditing part of that asset as per the income tax law. But there are certain constraints," Mahtab added.

Concerns Over Digital Rupee's Adoption

The committee discussed what further policy interventions may be required to strengthen India's digital financial ecosystem while ensuring adequate safeguards for consumers, financial institutions and the broader economy. "What India should do is to find a way out. In comparison to other digital assets, RBI's digital asset is not flourishing as such," the Chairman observed, referring to the relatively modest pace of adoption of the digital rupee compared with privately issued digital assets.

The review of the digital currency ecosystem comes amid wider efforts by the parliamentary panel to examine financial sector reforms, modernise regulatory frameworks and understand the implications of rapidly evolving financial technologies. (ANI)

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