An official of India’s central bank, the Reserve Bank of India (RBI), says the country’s central bank digital currency (CBDC) will act as an alternative to cryptocurrency. He stressed that the digital rupee should have all the attributes of a physical currency, including anonymity.
CBDC Update in India
Reserve Bank of India (RBI) Executive Director Ajay Kumar Choudhary provided some updates on India’s central bank digital currency (CBDC) during an interview with CNBC-TV18 on Friday.
India’s central bank is exploring the offline functionality of the digital rupee, Choudhary reported. Noting that CBDC will soon become a medium of exchange in India, he stressed that it should have all the characteristics of physical currency, including anonymity. The RBI executive had earlier said that India’s CBDC design would be the least disruptive and would not replace physical currency or the current financial system.
Choudhary further told the news outlet that the digital rupee will provide the public with a digital form of money and act as an alternative to cryptocurrencies. His statement echoed RBI Deputy Governor T. Rabi Sankar’s recent assertion that the digital rupee should be able to do everything cryptocurrency can do but without the risks associated with crypto.
India’s central bank began piloting its digital rupee in wholesale sector in November and retail sector in December last year. Reliance Retail has become the first retailer to accept digital rupees. Last month, Sankar revealed that the digital rupee now has over 50,000 users and is accepted by 5,000 merchants.
RBI Governor Shaktikanta Das said in December last year that CBDC is the currency of the future. He explained that India’s existing real-time instant payment system, Unified Payments Interface (UPI), relies on banks as intermediaries, while CBDCs function more like physical notes with an automatic entry and exit feature.
Meanwhile, RBI continues to recommend a total ban on cryptocurrencies including Bitcoin and Ether. Das warned that crypto poses big risks on India’s financial stability, monetary system and cyber security. He further warned that he could undermine the power of the central bank.
What do you think about RBI CEO’s statements on digital rupee? Let us know in the comments section below.
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