BJP spokesperson Pradeep Bhandari proposes the introduction of a rupee-backed digital currency to create a more efficient and cost-effective system for international payments.
Benefits of the Digital Rupee for Remittances
India receives more remittances than any other country, totaling over ₹11 lakh crore annually. Bhandari noted that current transfer systems remain costly and slow for many families. A blockchain-based Digital Rupee could enable near-instant transfers at lower costs, operating around the clock and on transparent networks. This could significantly reduce delays and fees for millions of households.
Economic Aspects of the Digital Rupee
Bhandari mentioned that a Digital Rupee could also bring economic benefits domestically. As each unit would be backed by government bonds, it could create steady demand for government debt and help lower borrowing costs. This would also provide the Reserve Bank of India (RBI) with more room to adjust interest rates and maintain economic stability. Bhandari suggested a step-by-step rollout of the Digital Rupee, starting with regions like West Asia, where India has strong trade and a large diaspora.
Need for Stablecoin Regulation
On a broader policy front, former RBI Executive Director G. Padmanabhan recently urged the government to take a clear position on stablecoins. He noted that without a clear stance, India could face the same uncertainties experienced with cryptocurrencies. Bhandari added that a Digital Rupee could help the rupee gain more global acceptance, lower remittance costs, and position India at the forefront of digital finance.
The proposed Digital Rupee as a tool for simplifying international remittances could significantly change India's financial landscape, providing faster and cheaper transactions while promoting monetary stability.
