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The Reserve Bank of India has confirmed it is actively developing a digital currency and will make a decision “very soon,” as reported by The Financial Times. ??
Paypal leaves the Indian domestic payments marketAnother development in the Indian payments market comes with the exit of global payments giant Paypal. It has announced that it is shutting down domestic services within India.
As the Indian government prepares to introduce the cryptocurrency bill that seeks to both ban cryptocurrencies and create a regulatory framework for the digital rupee to be issued by the RBI, the central bank has made an announcement of its own.
We state in our digital payment document that digital currency is a work in progress in the RBI.
An internal committee is taking a close look to decide on the model of the central bank digital currency and you will hear from the Reserve Bank very soon in the matter.
This document from the Reserve Bank of India clarifies that it is “exploring the possibility as to whether there is a need for a digital version of fiat currency and, if so, how to operationalize it.” A further ground-breaking change in India's domestic payments market is the exit of Paypal, which has announced it is shutting down services within India. As The Hindu Business Line reported Friday, Paypal's decision came at a time when digital transactions hit new records every month. A Paypal spokesperson said, "From 1 April 2021, Paypal will shift its attention to international sales for Indian businesses. In addition, it will cease domestic payments for Indian consumers." “Our digital payment document spells out that digital currency is work in progress in RBI.”
The RBI governor likely referred to the “Booklet on Payment Systems” that the central bank published last week. In the document, the RBI recognized that cryptocurrencies have gained popularity in recent years and clarified that it “is exploring the possibility as to whether there is a need for a digital version of fiat currency and in case there is, then how to operationalise it.”
Paypal Exiting Indian Domestic Payments Market
Another change in the Indian payments market is the exit of global payments giant Paypal, which has announced that it is shutting down domestic services within India. As the rule states, third party applications providing payment services via UPI can process 30 percent of the transactions starting Jan. 1, 2021, the news outlet speculated.
Does the RBI need to issue digital currency?
This means we will no longer offer domestic payment services within India from 1 April.
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Paypal was gearing up to roll out its UPI platform when the National Payments Corporation of India (NPCI) imposed a new set of rules in November last year. ??
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