An official at 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 must possess all the attributes of the physical currency, including anonymity.
India CBDC Update
Reserve Bank of India (RBI) Chief Executive Officer Ajay Kumar Choudhary provided some updates on India’s central bank digital currency (CBDC) during an interview with CNBC-TV18 on Friday.
The Indian central bank is exploring the offline functionality of the digital rupee, Choudhary conveyed. Noting that CBDC will soon become a medium of exchange in India, he stressed that it must have all the characteristics of physical currency, including anonymity. The RBI chief executive said earlier that India’s CBDC design will be the least disruptive and will not replace the current physical currency or financial system.
Choudhary further told the news outlet that the digital rupee will provide the public with a form of digital money and act as an alternative to cryptocurrencies. His statement echoed the recent assertion by RBI Deputy Governor T. Rabi Sankar that the digital rupee should be able to do everything that cryptocurrencies can do, but without the associated risks of cryptocurrency.
India’s central bank began testing its digital rupee in the wholesale sector in November and in the retail sector in December last year. Reliance Retail became the first retailer to accept digital rupees. Last month, Sankar revealed that the digital rupee now has more than 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 clarified that India’s existing real-time instant payment system, Unified Payments Interface (UPI), relies on banks as intermediaries, while a CBDC works more like physical banknotes with an automated check-in and check-out function.
Meanwhile, the RBI continues to recommend a complete ban on cryptocurrencies, including bitcoin and ether. Das has warned that cryptocurrencies pose significant risks to India’s financial stability, monetary system, and cyber security. Furthermore, he warned that it could undermine the authority of the central bank.
What do you think of the RBI CEO’s remarks on the digital rupee? Let us know in the comments section.
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