Inter-departmental group to study launching of fiat digital currency
April 11 , 2018 2338 days 1019 0
The Reserve Bank of India (RBI) has constituted an inter-departmental group to study and provide guidance on feasibility to introduce fiat digital currency backed by it.
Fiat currency is currency that a government has declared to be legal tender which is different from cryptocurrency which is not legal tender and not backed by government.
The Bank of England was one of the first to initiate a global discussion on prospects for introduction on Fiat digital currency.
In November 2017, the central bank of Uruguay had announced to begin test to issue digital Uruguayan pesos.
Fiat Digital Currency (or Central bank digital currency) is the digital form of fiat money which is currency established as money by government regulation or law.
As opposed to private digital tokens, fiat digital currency will be issued by central bank.
Fiat Digital Currency will constitute liability of central bank, and will be in circulation in addition to widely used paper and metallic currency.
They will be based on blockchain technology which is backbone of unregulated virtual currencies like bitcoin.