There is no plan by the government to introduce cryptocurrency, the Parliament was told on Tuesday.
There is no plan to introduce a cryptocurrency and currently, it is unregulated in India, Minister of State for Finance Pankaj Chaudhary told Rajya Sabha in a written reply.
"Reserve Bank of India (RBI) does not issue cryptocurrency. Traditional paper currency is legal tender and is issued by RBI in terms of provisions of RBI Act, 1994. A digital version of traditional paper currency is called Central Bank Digital Currency (CBDC)," the minister said.
In reply to another question, the minister informed the upper house that the RBI is currently working towards a phased implementation strategy for introduction of CBDC and examining use cases that could be implemented with little or no disruption.
He stated that the introduction of CBDC has the potential to provide significant benefits such as reduced dependency on cash, higher seigniorage due to lower transaction costs, etc
The minister further informed the house that printing of notes has declined over a period of time. "During 2019-20 notes worth Rs 4,378 crore were printed, while in 2020-21, notes worth Rs 4,012 crore were printed. In 2016-17, notes worth Rs 7,965 crore were printed," he said.
India's public sector banks (PSB) are expected to achieve credit growth as well as adhere to the minimum capital requirements without any fresh capital infusion from the Centre.
According to Brickwork Ratings, in FY23, banks will be able to achieve credit growth of 8-9 per cent.
"Between FY17-FY20, the government injected Rs 3,000 billion in PSBs in order to help the banks maintain the minimum capital requirement, as well as manage huge amounts of bad assets in their books," the agency said.
"The funds not only improved the Capital to Risk weighted Assets Ratio (CRAR) of PSBs from 11.7 per cent in FY18 to 14 per cent in FY21, but also acted as a cushion for the banks against the potential shocks of the pandemic."
Notably, the Centre had further infused Rs 200 billion and Rs 150 billion in FY21 and FY22, respectively.
"There has been no further announcement of capital infusion in FY23 as per Union Budget FY23."
As part of the restructuring of the banking sector of India, Centre has merged 10 PSBs into four banks in 2021.
"This has provided a larger capital base for the banks and has reduced the need for capital infusion from the government."
Besides, the agency cited that credit growth has been anaemic over the past few years due to the economic slowdown, as well as the stressed balance sheets of banks in India.
"The Covid-19 pandemic proved to be another setback as credit growth slipped on account of huge business disruptions."
"However, with economic revival being faster than expected, credit growth for banks is expected to be around 7.5-8.5 per cent in FY22 and to further improve to 8-9 per cent in FY23."
Luxembourg's foreign minister said Friday that the 27-nation European Union was “very close to agreement” for asset freeze of Russian President Vladimir Putin and Foreign Minister Sergey Lavrov.
Jean Asselborn said before a meeting of EU foreign ministers to discuss Russian sanctions “I think we are very close to an agreement, that we will find an agreement here,” for sanctions on the two.
“There will be a discussion but I think we agree that Putin and Lavrov, as far as the freezing of assets is concerned, that we will find a consensus here,” he said.
EU leaders largely agreed it was too soon to impose a travel ban on Putin and Lavrov because negotiating channels needed to be kept open.
The world has made it clear that a military intervention in Ukraine is off the books, so most countries on Friday were throwing ever more punishment at Moscow — from financial to football sanctions — anything to force President Vladimir Putin to stop the brutal invasion of Russia's neighbour and unleash a major war in Europe.
Undeterred in the game of punitive sanctions, Russia started its own tit-for-tat measures, banning British flights to and over its territory in retaliation to a similar U.K. Ban on Aeroflot flights.
Yet with the Kremlin's eyes fully targeted on expanding the attacks on Ukraine, almost of the action was still going one way.
European Union leaders discussed until the early hours Friday any ways to hit Putin even harder than the two sets of sanctions that it already approved.
“We are hitting the regime at all levels and we are hitting it hardest,” Dutch Prime Minister Mark Rutte said early Friday.
The 27-nation bloc and other Western powers like the United States and the United Kingdom have agreed on a slew of sanction hitting everything from the banking sector to oil refineries and the defense sector.
EU foreign ministers will push the approval process further later in the day.
And just as Russia was making a pincer movement to choke Ukraine and its capital Kyiv, Western powers were implementing measures aimed at "asphyxiating Russia's economy,” in the words of French Foreign Minister Jean-Yves Le Drian.
Seeking to buttress its eastern flank, the NATO alliance was holding a virtual summit of government leaders, including US President Joe Biden, later Friday.
In terms unheard since the Cold War, threats were flying from all sides and ran through society.
In a sign of papal anger, Pope Francis went to the Russian Embassy himself to “express his concern about the war", the Vatican said. It was an extraordinary, hands-on gesture, since usually popes receive ambassadors and heads of state in the Vatican.
For Francis, the Vatican head of state, to leave the city state and travel a short distance to the Russian embassy to the Holy See was a sign of his displeasure.
The May 28 UEFA Champions League final, the Superbowl of European soccer, was stripped from St. Petersburg and replaced by Paris after the involvement of French President Emmanuel Macron. Formula One also dropped this season's Russian Grand Prix at Sochi in protest.
Action wasn't only limited to Western powers. Countries in Asia and the Pacific have joined the United States, the 27-nation European Union and others in the West in piling on punitive measures against Russian banks and leading companies.
The nations have also set up export controls aimed at starving Russia's industries and military of semiconductors and other high-tech products.
“Japan must clearly show its position that we will never tolerate any attempt to change the status quo by force,” Prime Minister Fumio Kishida told reporters Friday while announcing new punitive measures that included freezing the visas and assets of Russian groups, banks and individuals, and the suspension of shipments of semiconductors and other restricted goods to Russian military-linked organisations.
New Zealand Prime Minister Jacinda Ardern said “an unthinkable number of innocent lives could be lost because of Russia's decision,” and announced targeted travel bans against Russian officials and other measures.
Taiwan announced Friday that it would join in economic sanctions, although it did not specify what those would be. They could potentially be focused on export control of semiconductor chips, where Taiwan is the dominant producer.
While most nations in Asia rallied to support Ukraine, China has continued to denounce sanctions against Russia and blamed the United States and its allies for provoking Moscow.
Beijing, worried about US power in Asia, has increasingly aligned its foreign policy with Russia to challenge the West.
“Tthe Chinese government is following through on easing trade restrictions with Russia and that is simply unacceptable,” Australian Prime Minister Scott Morrison complained. “You don't go and throw a lifeline to Russia in the middle of a period when they're invading another country,” he added.
South Korean President Moon Jae-in said his nation will join international sanctions, but won't consider unilateral sanctions.
Indian Prime Minister Narendra Modi phoned Putin late Thursday and appealed for an “immediate cessation of violence,” his office said in a statement.
His permanent UN representative stopped short of either condemning Russia or acknowledging Ukraine's sovereignty.
The cautious statement reflects India's delicate position. It relies heavily on Russia, a historic partner, for military equipment but has sought to strengthen ties with the West over the years.
At the United Nations, officials set aside $20 million to boost UN humanitarian operations in Ukraine. Separately, the UN Security Council is expected to vote Friday on a resolution condemning Russia and demanding the immediate withdrawal of all its forces. Moscow, however, is certain to veto it.
The European Union Aviation Safety Agency extended to 200 nautical miles the airspace it considers risky, and warned of “the threat of missile launches to and from Ukraine.”
Protests by Ukrainians and their supporters were planned Friday across Asia and Europe. Public buildings, sports stadiums and landmarks in the Australia and Europe were illuminated in Ukraine's national colours of blue and yellow.
A status quo in repo rate underlines RBI's priority in supporting GDP growth amid the lingering impact of the pandemic, while additional measures for MSMEs, contact-intensive sectors and digital transactions augurs well for the overall economic health, financial market participants said on Thursday.
For the 10th time in a row, the six-member rate setting Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept the key repo rate unchanged at 4 per cent, mainly to support growth as well as to manage inflationary pressure.
The MPC decided, with a 5 to 1 majority, to continue the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy.
The monetary policy stance of the central bank suggests that it will follow a more calibrated approach towards policy normalisation.
George Alexander Muthoot, MD, Muthoot Finance said: "We are hopeful and optimistic about broad-based economic revival in 2022 as both RBI and the government are working together to revive and sustain growth on a durable basis post the challenges posed by the pandemic. We welcome RBI's stance of enabling better infrastructure for MSME receivables and extension of on-tap liquidity window for contact-intensive sectors."
Continuing the accommodative stance means RBI and the government still want to prioritize economic recovery above all else, Sandeep Bhardwaj, CEO, Retail, IIFL Securities said.
Payments and financial technology solutions provider Euronet Worldwide's MD, India and South Asia, Pranay Jhaveri said RBI's decision to raise the e-RUPI limit to Rs 1 lakh would accelerate DBT (direct benefit transfer) dissemination by the government and allow accrual, ultimately resulting in improved welfare of the underprivileged section of the economy.
The Reserve Bank on Thursday increased the cap on the e-RUPI prepaid digital vouchers to Rs 1 lakh from Rs 10,000 and permitted its usage multiple times to facilitate digital delivery of various government schemes to the beneficiaries.
The e-RUPI is a prepaid digital voucher, developed by the National Payments Corporation of India (NPCI).
Built on UPI rails, e-RUPI removes friction, works in an offline mode, and enables the large population of people receiving DBT to grow their digital payments footprint.
RBI has also decided to raise the limit for MSME financing on TReDS platform to Rs 3 crore from Rs 1 crore.
"The increase in NACH (National Automated Clearing House) limit to Rs 3 crore is a welcome move from RBI as we receive frequent requests to handle invoices up to Rs 8-10 crore and onwards at RXIL.
"The increased limit, on the other hand, will help MSME financing because it will make it easier to submit fewer invoices given the revised limit of Rs 3 crore. We hope in the near future RBI will consider our recommendation to raise this limit to Rs 5 crore," Ketan Gaikwad, CEO and MD of RXIL (TReDS platform) said.
Arun Singh, Global Chief Economist, Dun & Bradstreet said the extension of on-tap liquidity for emergency health services and contact-intensive sectors, and increase in NACH limit for TReDS related settlements will provide some respite to MSMEs.
The status quo on repo rate will accelerate growth momentum in the economy and it remains committed to supporting sustained growth activity, Rajiv Sabharwal, MD & CEO, Tata Capital Ltd said.
"The recent spike in crude oil prices and the spillover effect on the inflation trajectory is being monitored closely by RBI. The softening in food inflation and strong agricultural output will help manage inflation within the comfort corridor of RBI," Sabharwal said.
The accommodative stance indicates that there will be no aggressive rate hikes in 2022, which is a positive for consumers, Umesh Revankar, Vice Chairman & MD, Shriram Transport Finance said.
"Any hike in rates would have impacted MSMEs which are in revival mode. Both the RBI and the government with its thrust on capital spending in the recent budget are working in tandem to revive and support broad based economic recovery," he added.
With RBI Governor Shaktikanta Das dousing fears of premature tightening and no additional MPC member voting for a stance change, a shift to a neutral stance in April 2022 appears to be ruled out, unless the CPI inflation exceeds the upper threshold of 6 per cent in both January and February 2022, Aditi Nayar, Chief Economist, ICRA said.
"MPC's forecast of a 4.3-4.5 per cent GDP growth in H2 FY2023 belies conviction in a back-ended pickup in growth driven by government and private capex," she said.
V Swaminathan, CEO, Andromeda and Apnapaisa said:"Keeping the rates unchanged is a signal that growth is being prioritised over all else. It remains to be seen what happens over the next quarter."
Inability to raise money for future unidentifiable acquisitions would impact capital raising plans of some unicorns, experts said after SEBI announced new IPO norms.
Yash Ashar, Partner and Head, Capital Markets, Cyril Amarchand Mangaldas, said the companies impacted are particularly those which may not have any other use of capital and where the existing shareholders are not keen to sell.
SEBI, at its recently-concluded last board meeting for 2021, among other proposals, made certain changes to the issue structure of an IPO in India. These include restricting the quantum of issue proceeds a company can use for unidentified inorganic growth, as well as restricting the number of shares that can be offered by selling shareholders and increasing the lock up of shares subscribed by anchor investors.
"Inability to raise money for future unidentifiable acquisitions would impact capital raising plans of some unicorns, particularly where such companies may not have any other use of capital and where existing shareholders are not keen to sell," Ashar said.
Ashar said large amount of flexibility to use funds is a hallmark of those listing their equity shares on international stock exchanges, and investors vote with their feet when they are not happy with the use of such funds, including any new acquisition which they don't like.
These amendments are mainly a reaction to several IPOs earlier this year and follow after consultation papers were issued by SEBI. These proposed changes to the law could have long-term impact, he added.
"The regulator could have prescribed additional and more detailed continuous disclosures and monitoring, keeping in mind the existing requirements, including shareholder approval for proposed acquisitions. These changes may impact the plans of the issuers planning to list on Indian stock exchanges," Ashar said.
SEBI has prescribed changes in the Draft Red Herring Prospectus (DRHP) filed on or after notification in the Official Gazette.
In the conditions for objects of the issue, it said where the issuer company in its offer documents sets out an object for future inorganic growth but has not identified any acquisition or investment target, the amount for such objects and the amount for general corporate purpose (GCP) shall not exceed 35 per cent of the total amount being raised.
The amount so earmarked for such objects where the issuer company has not identified acquisition or investment target, as mentioned in objects of the issue in the draft offer document and the offer document, shall not exceed 25 per cent of the amount being raised by the issuer.
Axis Bank on Monday said it will raise up to Rs 5,000 crore by issuing bonds.
In April this, the board of directors of Axis Bank had authorised it to borrow/raise funds in Indian currency/foreign currency by issue of debt instruments, perpetual debt instruments, AT 1 bonds, infrastructure bonds and Tier II capital bonds among others up to an amount of Rs 35,000 crore.
"We now wish to inform you that the bank proposes to raise funds by issuing senior unsecured taxable redeemable non- convertible debentures of Rs 10 lakh each for cash at par with base issue size of Rs 2,000 crore and green-shoe option to retain over-subscription of Rs 3,000 crore thereby aggregating up to Rs 5,000 crore," Axis Bank said in a regulatory filing.
Stock of Axis Bank traded at Rs 663.25 apiece on the BSE, down by 3.74 per cent from previous close.
Prime Minister Narendra Modi on Thursday said that Centre's banking reforms during the past six-to-seven years have supported the sector in "every way".
Addressing a conference themed 'Creating Synergies for Seamless Credit Flow and Economic Growth', he said these reforms have improved banking sector's overall health, because of which it is in a "very strong" position today.
"We addressed the problem of 'NPAs', recapitalised banks and increased their strength. We brought reforms like IBC, reformed many laws and empowered debt recovery tribunal. A dedicated 'Stressed Asset Management Vertical' was also formed in the country during the Covid-19 period," he said.
"Indian banks are strong enough to play a major role in imparting fresh energy to the country's economy, for giving a big push and making India self-reliant."
Addressing the gathering via video link, he said this is the time for the sector to support wealth creators and job creators.
"It is the need of the hour that now the banks of India work proactively to bolster the wealth sheet of the country along with their balance sheets," he said.
Additionally, he mentioned that the steps taken in the recent past have created a strong capital base for the banks.
Furthermore, he pointed out that banks' sufficient liquidity and no backlog for provisioning of 'NPAs' -- which is at the lowest in the last five years have led to the upgrading of outlook for the Indian banks by the international agencies.
Also, banks have a crucial role to play in making the recently announced production-linked incentive (PLI) projects viable through their support and expertise, he added.
Recently, 'PLI' schemes were announced to incentivise select sectors in increasing their capacity manifold and helping them become competitive globally.
Gross non-performing assets (NPAs) of banks will rise to 8-9 per cent this fiscal, well below the peak of 11.2 per cent seen at the end of fiscal, ratings agency Crisil said in a report.
The Covid-19 relief measures such as the restructuring dispensation, and the Emergency Credit Line Guarantee Scheme (ECLGS) will help limit the rise, the report added.
With 2 per cent of bank credit expected under restructuring by the end of this fiscal, stressed assets-comprising gross NPAs and loan book under restructuring-should touch 10-11 per cent.
Krishnan Sitaraman, Senior Director and Deputy Chief Ratings Officer, CRISIL Ratings, said: "The retail and MSME segments, which together form 40 per cent of bank credit, are expected to see higher accretion of NPAs and stressed assets this time around. Stressed assets in these segments are seen rising to 4-5 per cent and 17-18 per cent, respectively, by this fiscal end. The numbers would have trended even higher but for write-offs, primarily in the unsecured segment."
The retail segment, which had a relatively stable run over the past decade, has been singed by the pandemic, with salaried and self-employed borrowers alike facing significant income challenges and higher medical expenses, especially in the second wave.
Thus, in a first-of-its-kind move, the Reserve Bank of India (RBI) introduced loan restructuring for retail borrowers to help them tide over the situation. This followed a six-month moratorium permitted by lenders last fiscal.
Despite the measures, CRISIL Ratings believes stressed assets in the retail segment will rise to 4-5 per cent by the end of this fiscal from 3 per cent last fiscal. While home loans, the largest segment, will be the least impacted, unsecured loans are expected to bear the brunt of the pandemic.
The MSME segment, despite benefiting from ECLGS and the recent limit enhancement and tenure extension, is likely to see asset quality deteriorate and will require restructuring to manage cash-flow challenges. In fact, restructuring is expected to be the highest for this segment, at 4-5 per cent of the loan book, leading to a jump in stressed assets to 17-18 per cent by this fiscal end from 14 per cent last fiscal, Crisil said.
The corporate segment, though, is expected to be far more resilient. A large part of the stress in the corporate portfolio had already been recognised during the asset quality review initiated five years ago. That, coupled with the secular deleveraging trend, has strengthened the balance sheets of corporates, and enabled them to tide over the pandemic relatively unscathed compared with retail and MSME borrowers. This is evident from restructuring of only 1 per cent in the segment. Consequently, corporate stressed assets are expected to remain range-bound at 9-10 per cent this fiscal.
The rural segment, which was hit harder during the second wave of the pandemic, has also seen a strong recovery. Therefore, stressed assets in the agriculture segment are expected to remain relatively stable.
Subha Sri Narayanan, Director, CRISIL Ratings, said: "While the performance of the restructured portfolio will definitely need close monitoring, the slippages from the restructured book are expected to be lower this time. Restructuring under various schemes in the past focussed on larger exposures and primarily involved extension of maturity without any material haircuts, resulting in high subsequent slippages. This time, the entry barriers for restructuring are more stringent. Also, recent trends indicate that a reasonable proportion of borrowers, primarily on the retail side, have started making additional payments as their cash flows improve, despite having availed of restructuring. MSMEs, however, may take longer to stabilise and we remain watchful."
The estimates of CRISIL Ratings are predicated on a base-case scenario of 9.5 per cent GDP growth this fiscal and continued improvement in corporate credit quality.
A virulent third wave and significant deceleration in demand growth could pose significant downside risks to these estimates. On the other hand, operationalisation of the National Asset Reconstruction Company Ltd by the end of this fiscal and the expected first-round sale of Rs 90,000 crore NPAs could lead to lower reported gross NPAs.
Reserve Bank of India (RBI) has relaxed the restrictions on HDFC Bank and allowed the lender to issue new credit cards.
However, the restrictions on all new launches of the digital business generating activities planned under 'Digital 2.0' will continue till further review by RBI.
"The RBI vide its letter dated August 17, 2021 has relaxed the restriction placed on sourcing of new credit cards. The Board of Directors of the bank has taken note of the said RBI letter," HDFC Bank said in a regulatory filing.
The bank said that it will continue to engage with RBI and ensure compliance on all parameters.
In December 2020, RBI directed asked HDFC Bank to temporarily stop all launches of the 'Digital Business generating activities and sourcing of new credit card customers on certain incidents of outages in the Internet banking, mobile banking and payment utilities of the bank over the past two years.
Shares of the bank surged on the back of the relaxation. Around 10.45 a.m., its shares on the BSE were trading at Rs 1,541.80, higher by Rs 26.95 or 1.78 per cent from its previous close.
Online insurance marketplace Policybazaar has filed a draft red herring prospectus with the Securities Exchange Board of India for an initial public offering to raise Rs 6,017.50 crore from the market.
With this, Policybazaar joins a growing number of Indian startups looking to raise funds from the capital markets to support the country's booming digital economy.
The IPO will be undertaken by PB Fintech Ltd, the parent of Policybazaar. The issue comprises fresh issue of Rs 3,750 crore worth of equity shares and an offer for sale of Rs 2,267.50 crore by existing shareholders and promoters.
The OFS will see sale of up to Rs 1,875 crore worth of shares by SVF Python II (Cayman) and up to Rs 392.50 crore by others.
The company also proposes to raise Rs 750 crore through placement of shares before the IPO. Information regarding this has already been shared by the company with the regulator.
A major chunk of money raised through the IPO will be used for expansion of the company's operations and for furthering growth plans. Reports suggest that Policybazaar is seeking a valuation of $5.5-6 billion.
Policybazaar is backed by investors such as Softbank, Temasek, Info Edge, Tiger Global Management and Tencent Holdings Ltd., was founded in 2008 to tap vast under-served Indian insurance market.
It's IPO follows good response received by another Indian startup Zomato. This IPO received overwhelming response from the market that has seen its shares jump over 80 per cent.
Policybazaar works on the business model that provides its customers choice of policies at different price points and helps them in making an informed decision on insurance.
The success of this IPO is expected to open the floodgates for similar entities to tap the market.
Kotak Mahindra and Morgan Stanley are the global coordinators for PB Fintech's IPO. Other bookrunners include Citigroup, ICICI Securities, HDFC Bank, IIFL Securities and Jefferies.
Crypto currency is very common word for the last few years and Bitcoin has been the most famous brand in this sector. While writing this article news popped up that Amazon was going to accept Bitcoin as payment for its e commerce transactions. This announcement is going to be the game changer for the Bitcoin as Amazon platform is selling almost everything which a common man needs. It means alone Amazon etc E Commerce companies can give lot of sustainability to the Bitcoin which in turn will nudge people to have faith and confidence in using Bitcoin etc as transactional currency instead of keeping them merely an investment instruments due to increase in their exchange rates vis a vis to Dollar. Now Govt must intervene so that Amazon cannot declare such parallel currency to become common man’s obsession or possession.
The crypto currencies do not have any regulators and guarantors for their values in denominations. This is the biggest drawback and insecurity for their holders and investors. Despite this, crypto currencies are getting public support because of their universal acceptability and escape opportunities from the currency conversion charges to be paid by buyers of different currencies. Since crypto currencies can straightway be stored in digital wallets and paid globally without carrying them physically, they have been very convenient and less costly currencies to visitors going abroad.
The biggest danger emerging from the crypto currencies is that enforcement agencies do not have any control whether Bitcoin etc. have been earned legally or paid legally for the valid transactions, globally. That is the reason crypto currencies are the favourites of underworld to do all kinds of transactions and storing the money digitally. Since crypto currencies are based on block chain technology, there is nil possibility of tinkering them from inside at software level but they are vulnerable to be stolen if the security passwords of wallets are stolen are cracked etc.
There is hardly any mechanism to trace and track those (Crypto currencies) or seize them as per the norms of criminal jurisprudence along with jurisdictional boundaries as they can be globally shifted without any checks and balances. The crypto currencies may be very easy to use but they have lots of national security and safety of public money concerns as they cannot be considered to be equivalent to the legal tenders which national currencies are mandated to have.
To respond to the growing demand of crypto currencies, India too has planned its own digital currency. Digital currency is the digital version of actual currency that can be stored in digital wallets as cash and can be spent like normal rupees etc. The national digital currency is different from digital transaction and crypto currency. The benefit of this is that the cost printing notes is nil but there is a requirement of robust technology with back end monitoring of the trails of digital currency. Besides, the digital currency can be monitored from the back end on the basis it’s digital footprints and trails to keep a watch on the illegal transactions and other criminal issues. Thus tracking of digital currency is easier than paper currency which make it more secure than paper currency if taken or stolen illegally. Besides, this can be easily loaded in wallets either through virtual ATMs or through various banking apps etc.
Once we have uploaded the digital cash, we can use it for any valid transaction more securely than cash, cheques or drafts. The instant transferability etc. are its super virtues. It is safer to carry and no fakers can fake it also. So the problem of counterfeit currency is also solved with the inception of digital currency. Of course, the digital currency will definitely be based on the block chain technology to give it the best cyber safety features. I think that except for low denomination notes, all big notes can be digitised. The Reserve Bank of India may issue digital currency using the block chain technology with unique codes and denominations, transferable to anywhere, maintaining the nuances of collaterals as it does with regard to legal tender.
The issue of cheque books and drafts etc can become irrelevant as these digital currencies will be more safe and user friendly with regard to banks, payers and payees. In the back end, these digital currencies will have complete movement trails from origin to exact locations, bringing more precision in the banking processes and law enforcement agencies, tracking the routes of illegal or criminally taken away money. So the cost cuts in the printing of currencies, clear trails for money tracking, with no possibility of counterfeits and customer and bank friendly digital currencies are the future. Here I would like to point out that digital currency should not be confused with digital transactions we do. Even today we do digital transactions but they are co terminus to paper money. Digital currency itself is an asset and currency both. It can be digitally transacted in much safer way as its back end trail of denominations and mobilities are far more traceable in real time or on post facto basis.
Once state actors come with their digital currencies, I am sure that crypto currencies will not be required and its illegality must be declared. It can further be enacted that transacting with crypto currencies are illegal as they are neither backed by legal tender nor guaranteed by the sovereign. This will finish these crypto currencies being a hot cake for the underworld or tax evaders.
The digital currency should start initially in higher denominations in parallel to the paper currency. Once people become educated and user friendly, it can replace the large segment of paper currency with digital currency. The uploading and down loading of digital currencies can be designed in way without compromising the safety features. I think that it will disrupt the business of ATMs drastically, perhaps they may not be required at all. This will save huge costs for banks from running and maintaining ATMs. Besides, banks may save lot of money with regard to staff etc. for counting and transporting the paper currencies, printing cheque books and drafts including their clearances which may be instant with the digital currency, being verified simultaneously.