Opinion
The rupee’s digital future is far more relevant than its domestic heritage
Summary
- A political row over the linguistic origin of the ‘ ₹’ symbol mustn’t distract us from the need to ensure that India’s currency evolves in optimal response to tech shifts and geo-economic flux. The past may be prologue, but the future is relevant.
What’s in a symbol? A lot, if one goes by last week’s political storm over Tamil Nadu’s substitution of India’s rupee sign ‘ ₹’ with a similar sounding letter in the Tamil script for the logo of its state budget. Union finance minister Nirmala Sitharaman called it an example of “language and regional chauvinism" that reflects a “mindset that weakens Indian unity."
In Chennai, the state’s ruling party, Dravida Munnetra Kazhagam, said the idea was to give the local language importance this year. Politically, the context is fraught: it combines Centre-state tensions with long resistance in the southern state to any hint of Hindi dominance. Practically, we could view it as just another heritage play and draw comfort from the strength of the rupee’s record on that score.
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Our national currency has been in use for almost half a millennium, about twice as long as the US dollar has existed. The row was merely over its representation. Questions of heritage, however, are largely irrelevant in the larger scheme of things. What matters is our vision of the rupee’s future. As a market creation, it must evolve as a function of its economic purpose.
In an era of digital globalization, any currency needs to sharpen an edge on its basic appeal, be it as a unit of account, medium of exchange or store of value. To that end, India’s adoption of the ‘ ₹’ symbol in 2010 marked a moment of foresight. Recognition matters. Even Bitcoin, a crypto coined just a year-and-a-half earlier to give nation-states a run for their fiat money, has had the aid of a ‘B’ symbol with vertical bars to imprint itself on human synapses.
Sure, the rupee glyph is drawn from the ‘R’ in Devanagri script, and clearly so, but the genius of its design lies in its visual impact. With an extra horizontal bar, it cues the same sound in English, the lingua franca of global business. Thanks to a ‘vertical-horizontal illusion,’ which also explains why an upward stroke looks longer than a sideways one of the same size, our mind often tricks us to see a flat bar as an erect one (and vice-versa). The rupee glyph, thus, achieves familiarity even in the Latin script. It boosts brand recognition, a key market strength in today’s world.
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Even so, the rupee’s functionality must evolve too. This is not just about ease of use. At a base level, its purchasing power must be held steady. At another, it needs tech enablers to match the advantages of a digital currency. For this, the e-rupee should prove handy. As a direct issuance of the Reserve Bank of India, it’s free of risks related to bank solvency. Technically, it could enable cheap transfers both within India and across borders, offer secrecy via encryption, let users ‘program’ it to move as directed, plus more.
The capacity to globalize the rupee assumes added relevance in times of flux. The dollar might be in for some volatility, as America’s stated policy aims don’t seem to add up. The White House wants to secure the dollar’s status as the currency of world trade and retain the privilege of churning out a reserve asset, which lets the US borrow cheaply from others and spend extravagantly, even as it overturns policies that favour trade and may try pushing the greenback’s value down to balance its imports and exports. Trade-offs, if ignored, could spell turbulence.
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Should a scenario of ‘each country for itself’ spark off a currency war, a non-trivial risk, we must be ready to adapt swiftly. That’s reason enough to rally around a rupee fit for the future. Whatever its heritage, the ‘ ₹’ symbol is a success. Let’s look ahead.
