The Indian government has expressed renewed skepticism towards cryptocurrencies such as Bitcoin while gearing up to unveil new digital currency initiatives backed by the Reserve Bank of India (RBI).

India is set to launch an RBI-backed digital currency, as stated by the country’s Commerce Minister Piyush Goyal during a roundtable discussion in Qatar, which was reported by local news outlet The Hindu on Tuesday.

Additionally, the RBI is expected to initiate a pilot project on deposit tokenization, as indicated by Suvendu Pati, the Chief General Manager of the fintech department of RBI, scheduled for Wednesday.

According to Reuters, the RBI plans to utilize the wholesale segment of India’s central bank digital currency (CBDC) for its deposit tokenization pilot in collaboration with various domestic banks.

Not a Stablecoin, Not a CBDC

Goyal mentioned that India’s upcoming digital currency will be supported by the RBI, focusing on streamlining transactions and enabling quicker, more transparent processes compared to traditional banking.

During the discussion, the minister expressed his opposition to an RBI-backed stablecoin project, asserting that the new system would allow for transactions that are “easier and more efficient.”

Source: India’s Commerce Minister Piyush Goyal

“It will only make it easier to transact. It will also reduce paper consumption and will be faster to transact than the banking system,” he stated, emphasizing the initiative will leverage blockchain technology to enhance transparency and reduce illicit transactions.

Crypto Not Encouraged or Discouraged: “We Only Tax It”

When announcing the RBI’s new digital currency project, Goyal reiterated skepticism towards cryptocurrencies like Bitcoin, arguing these assets lack any guarantees of value.

“We have not been encouraging cryptocurrency which does not have sovereign backing or which is not backed by assets,” he pointed out, clarifying that India has not imposed a ban on cryptocurrency trading and added:

“Suppose tomorrow there’s no buyer, there’s nobody to guarantee. It’s a thing you can do at your own risk and cost. The government doesn’t encourage or discourage. We only tax it.”

These comments followed Bitcoin’s recent surge, with the largest cryptocurrency by market cap hitting a new high above $126,000 on Monday, according to data from Coinbase.

India’s RBI has historically maintained a skeptical attitude toward cryptocurrencies, engaging in discussions regarding the potential of a ban on crypto transactions in the past.

The central bank initiated its wholesale CBDC project to enhance interbank settlements by reducing transaction costs in late 2022. Cointelegraph reached out to the RBI for comments about its new digital currency and tokenization initiatives, but no response was received prior to publication.