From Demonetisation to Digital Currency: How India Led the Global Shift Toward Sovereign Digital Money
From Demonetisation to Digital Currency: How India Led the Global Shift Toward Sovereign Digital Money India is a visionary nation. India had a serious problem of terrorism and funding terrorism through fake currency notes. India, to abate terrorism, opted for demonetisation on 8th November 2016. India introduced digital payment platforms simultaneously. We now have Bharat Pay, G Pay and even every bank has started their UPI. India has shown the world the path towards a digital world. Now, the west side of the globe is following India’s footsteps. USA PASSES LAW OF REGULATORY FRAMEWORK OF DIGITAL CURRENCY: The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, signed into law in July 2025, establishes the first comprehensive federal regulatory framework for payment stablecoins in the United States. It mandates 100% reserve backing, strict, liquidity requirements, and brings issuers under Bank Secrecy Act (BSA) compliance. Key Aspects of the GENIUS Act (2025-2026): Purpose: To foster innovation in digital assets while protecting consumers and ensuring financial stability. Reserve Requirements: Requires stablecoins to be backed 1:1 by high-quality, liquid assets, such as U.S. dollars or short-term Treasury bills. Issuer Regulation: Only permitted issuers can create payment stablecoins; they must adhere to capital and risk management rules. Consumer Protection: Guarantees redemption rights for stablecoin holders and mandates public disclosures of reserves. Compliance: Subjects issuers to anti-money laundering (AML), countering the financing of terrorism (CFT), and sanction requirements. International Scope: Foreign issuers targeting U.S. users are held to the same standards as domestic issuers. The Treasury Department is actively implementing the law, with public comment periods regarding the regulation of these digital assets extending into late 2025 Overview of U.S. Monetary Evolution The U.S. monetary system has undergone major changes, including: Early issuance of private bank and Treasury currencies. Creation of the Federal Reserve in 1914 as the sole currency issuer. Abandonment of gold and silver convertibility after 1933. These shifts were controversial decisions and actions but are now widely accepted. Emergence of Digital Currencies and CBDC Debate Private digital currencies (e.g., Bitcoin) and foreign CBDCs have prompted U.S. policy debates. A Central Bank Digital Currency (CBDC) is the digital form of a nation’s sovereign currency, issued and regulated by the central bank (e.g., RBI’s “Digital Rupee” or e₹). It acts as legal tender, is interchangeable 1:1 with physical cash, and is designed to make transactions faster, cheaper, and more secure. Key Aspects of CBDCs: Types: Divided into Retail (CBDC-R) for public use and Wholesale (CBDC-W) for interbank settlements. Storage: Held in digital wallets provided by banks, offering 24/7 transactions. Global Status: Over 130 countries, representing 98% of global GDP, are exploring or have launched CBDCs, driven by the need for enhanced digital payment efficiency. Digital Currency Vs. Crypto: Unlike cryptocurrencies, CBDCs are centralised, backed by the state, and not volatile. Goals: Reduce cash-handling costs, improve financial inclusion, and increase cross-border payment efficiency. Key questions include: Whether the Federal Reserve should issue a CBDC. Whether a CBDC would fundamentally change the financial system or simply modernise it. USA Congress has held several hearings and proposed multiple CBDC-related bills in recent sessions. Purpose of the […]
Read more
CAN SUPREME COURT IMPOSE TIME LIMIT UPON PRESIDENT OF INDIA OR GOVERNOR OF STATE FOR SIGNING BILL? DISCUSSION AND SUGGESTIONS.
Background: The Legislature for the State of Tamil Nadu, between 13.01.2020 and 28.04.2023, enacted and forwarded 12 Bills to the Governor for the grant of assent as per Article 200 of the Constitution. Even though the present Governor took charge of the office with effect from 18.11.2021, he did not take the necessary action on any of the said Bills forwarded to his office till October 2023. The State of Tamil Nadu, being aggrieved by the inaction on the part of the Governor, had to ultimately file the present writ petition before Court. The same was filed on 31.10.2023. The State Legislature, on 18.11.2023, convened a special session and repassed the 10 bills which were returned by the Governor after withholding of assent. The bills were passed without any material change and were forwarded to the Governor’s Secretariat on the same day for his assent in accordance with the first proviso to Article 200. This Court, in its order dated 20.11.2023, noted that since the re-passed 10 bills were pending with the Governor, the hearing of the writ petition be adjourned to 01.12.2023 and issued directions that this Court shall be apprised of the progress in the matter. On 28.11.2023, the Governor, without the aid and advice of the Council of Ministers of the State, in exercise of his discretion, reserved the said re-passed Bills for the consideration of the President. The letter of the Governor to the Union Government referring the said Bills for the consideration of the President mentioned that the Bills were re-considered and passed again by the State Legislature. Interestingly, although the Governor noted that the Bills were intra-vires the competence of the State Legislature having been legislated under Entry 66 of List I, Entry 32 of List II and Entry 25 of List III, yet he reserved the said Bills for the consideration of the President in the second round on the ground that the Bills suffered from repugnancy on account of being contrary to Entry 66 of the Union List i.e., List I. These grounds have been taken by the Governor to reserve the 10 Bills for consideration of the President. In the premises Chief Minister asked the Governor to (i) Recall the 10 Bills reserved for the consideration of the President and grant assent expeditiously;(ii) In future, grant assent to Bills passed by the State Legislature within 30 days and avoid unnecessary reservation of the bills for the consideration of the President; (iii) Act in accordance with the aid and advice tendered by the Council of Ministers. Matter went up to the Supreme Court COMMENTS OF AUTHOR Before going into the details of the Judgement, it is not highlighted that even the state government of Tamil Nadu was playing mischief with provisions of the Constitution. Question arises, how? Article 200 of the Constitution provides that if the Bill is returned by the Governor, the State Assembly may re-pass the Bill with or without modification and the Governor cannot withhold the same. (The said Article text is given herein below) Here also, the State Assembly re-passed the Bills without any amendments and without implementing the suggestions […]
Read more