"Fiat will be instead [when] the Reserve Bank starts issuing digital crypto currency, which you can carry in the cyber space with you, when you don't have to keep physical currency in your pocket, that's the way", he said.
The Reserve Bank of India (RBI) has a group looking into cryptocurrencies as legal tender, a senior official said on Wednesday, but emphasised the central bank's discomfort with bitcoin which has recently come under intense global regulatory scrutiny. "As regards non-fiat cryptocurrencies, I think we are not comfortable", Sen said.
Elaborating on what is a non-fiat cryptocurrency, Mr Sen said, "Bitcoins for example. That's a private cryptocurrency".
"Right now, we have a group of people who are looking at fiat cryptocurrencies".
RBI had not previously disclosed its plans on cryptocurrencies and Mr Sen did not provide any details on where discussions on the issue stand. Something that is an alternative to the Indian rupee, so to speak. The virtual currency, not backed by any government, has more than quadrupled in value since December to more than $4,100. "We are looking at that closely", Mr Sen said.
Currently, Bitcoin is the most popular digital currency while others include litecoin, peercoin, namecoin, ether and primecoin. These are mostly used for peer-to-peer transfers and are accepted in a few countries as payments.
In February 2017, the RBI had said that it has not authorised or licensed any company to operate in cryptocurrency.
As such, any user, holder, investor, trader, etc. dealing with VCs will be doing at their own risk, the RBI informed the parliamentary standing committee on finance.