December 6, 2023

At a recent event in Bangalore, Smt. India’s finance minister, Nirmala Sitharaman, spoke about how the country has been an early adopter of digital currencies and is testing its retail and wholesale CBDC to facilitate cross-border payments. However, she stressed that the technology must be used carefully and responsibly, and only with proper regulation.

Sitharaman highlighted the potential benefits of digital currency technology beyond just currency and how India should use this to advance the collective good. Nonetheless, governments or central banks must take the lead in ensuring the stability and security of the digital currency market. She added that an unregulated market could lead to chaos similar to the FTX incident, which had huge spillover effects around the world.

Key steps taken by India

As the world continues to go through the digital revolution, and India is still playing catch-up, being cautious when it comes to digital currencies — especially to avoid the pitfalls of an unregulated market — is the right move. According to cryptocurrency proponents, other countries need to follow India’s example.

India plans to introduce lessons on cryptocurrencies and artificial intelligence in some school curricula at the start of the next school year. The move is aimed at keeping up with technological advancements and ensuring students are equipped to navigate the digital world.

The Rise of Digital Currencies

The finance minister’s call for the responsible use of digital currencies comes at a time when the world is witnessing a surge in digital currency adoption. The rise of cryptocurrencies and other digital assets has disrupted the traditional financial system, and policymakers around the world are struggling to keep up.

As more countries and companies embrace digital currencies, there is a growing recognition that regulation is necessary to prevent market instability and protect consumers.

Looking ahead, it is clear that digital currencies will continue to shape the payments landscape, and policymakers will need to find ways to balance innovation and regulation. India’s cautious approach to digital currencies provides a useful framework for other countries as they grapple with the evolving digital environment. As the world continues to embrace digital technologies, responsible use and proper regulation will be key to ensuring digital currencies deliver on their promise of financial inclusion and economic growth.