Government to explore use of blockchain technology for ushering in digital economy

The government will explore the use of blockchain technology proactively for ushering in the digital economy, the Rajya Sabha was informed on Tuesday.

Minister of State for Finance Anurag Singh Thakur said it was announced in the Budget Speech of 2018-19 that the government does not consider crypto-currencies legal tender or coins and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.

"The government will explore the use of blockchain technology proactively for ushering in the digital economy," Thakur said in a written reply to a question on introduction of India's own crypto-currency.

On cash circulation in the country, he said that as per the weekly statistical supplement of the RBI, the Notes in Circulation (NIC) was Rs 17,741.87 billion as of November 4, 2016, and Rs 27,712.43 billion as of January 8, 2021, thereby recording an increase of 56.2 percent in a span of around four years two months.

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The growth in NIC depends on various macro-economic factors such as expected growth in GDP, inflation, interest rates, and growth in non-cash modes of payment, the minister added.

Digital payments transactions have been steadily increasing since the last few years post demonetisation.

The total transaction volume increased from 2,071 crore in FY2017-18 to 3,134 crore in FY2018-19, which corresponds to a growth rate of 51 percent, Thakur informed.

During 2019-20, the number of card payment transactions carried out through credit cards and debit cards increased by 23.5 percent and 16.1 percent, respectively, while the value increased by 21.1 percent and 35.6 percent to Rs 7.3 lakh crore and Rs 8 lakh crore, respectively.

Prepaid Payment Instruments (PPIs) recorded a volume growth of 15.7 percent on top of the 33.2 percent a year ago, while transactions value at Rs 2.2 lakh crore increased by little more than 1 percent.