An executive from India’s central bank, the Reserve Bank Of India (RBI), has shared that the country’s CBDC will act as a substitute for cryptocurrency. He also outlined that the digital rupee needs to possess all the same qualities as physical currency, such as anonymity.
India’s CBDC Development
Reserve Bank Of India (RBI) Executive Director Ajay Kumar Choudhary recently gave CNBC-TV18 an update on the progress of India’s central bank digital currency (CBDC).
The Indian central bank is currently researching the possibility of making the digital rupee available offline, according to Choudhary. He also mentioned that the CBDC should be able to carry out all the same tasks as physical currency, including anonymity. These plans had already been reported on by an RBI executive director.
The news outlet was also informed by a separate source that the digital rupee is intended to be an alternative to cryptocurrencies. This echoed the words of RBI Deputy Governor T. Rabi Sankar, who had said that the digital rupee should be able to do anything cryptocurrency can do, but without the associated risks.
India’s central bank launched the pilot of its digital rupee in the wholesale sector in November 2020, and then in the retail sector in December 2020. Reliance Retail was the first retailer to accept the digital rupee. Last month, Sankar reported that the digital rupee had been adopted by 5,000 merchants and had attracted over 50,000 users.
RBI Governor Shaktikanta Das said in December 2020 that the CBDC was the currency of the future. He noted that India’s existing immediate real-time payment system, the Unified Payments Interface (UPI), requires banks to act as intermediaries. A CBDC, on the other hand, would allow for cash-like transfers without the need for a third party.
The Reserve Bank of India (RBI) is looking to introduce its own digital currency as an alternative to cryptocurrencies like Bitcoin and Ethereum, according to a senior official. In an interview with a local news outlet, RBI executive director Sudarshan Sen said the new digital currency will act like physical cash while also having the convenience of an online payment system.
The bank is still pushing for a complete ban on cryptocurrencies though, stating that they pose a major risk to India’s financial stability, monetary system, and cyber security. It could also potentially undermine the central bank’s authority.
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