The Reserve Bank of India (RBI) reportedly put up a proposal for a three-step graded approach, regarding the CBDC release, which comes “with little or no disruption” to the traditional financial system.

Specifically, In February, upon the discussions related to the budget for 2022, Indian finance minister Nirmala Sitharaman shared details regarding release of a digital rupee, to offer a “big boost” to the digital economy. 

In the annual report rolled out on May 27th by India’s central bank, RBI reportedly disclosed its attempts to deep-diving into the pros and cons of releasing a CBDC.

In the report, RBI reportedly emphasized the necessity for India’s CBDC to stay compliant with India’s objectives associated with “monetary policy, financial stability and efficient operations of currency and payment systems.”

according to this need, at the moment, RBI is running examinations regarding the numerous design elements of a CBDC which possesses the co-existence ability throughout the current fiat system without causing disruptions. 

The Indian Finance Bill 2022, which enforced the release of a 30% crypto tax on unrealized gains, also offers a legal framework for the introduction of a digital rupee. 

“The Reserve Bank proposes to adopt a graded approach to introduction of CBDC, going step by step through stages of Proof of Concept, pilots and the launch.”

Halfway through 2022, at the proof-of-concept stage, RBI is in the process of finalizing the verification for the feasibility and functionality of releasing a CBDC.

In early May 2022, RBI authorities reportedly issued a warning against crypto adoption, mentioning the potential risks of “dollarization” of the Indian economy.