Jamal Al-Farouq India is embarking on a digital revolution, with the Reserve Bank of India (RBI) introducing a central bank digital currency (CBDC) as an alternative to cryptocurrency. An official of the Indian central bank has made a statement on their central bank digital currency policy, which should provide the same benefits of physical currency while also offering convenience and anonymity. This article will explore these key points and explain why India’s CBDC could become the future of digital commerce.
Exploring a Digital Revolution
RBI Executive Director Rabi Sankar recently provided updates on India’s Central Bank Digital Currency (CBDC) plans in a statement, noting that for the currency to become a medium of exchange, it needs to have features similar to physical currency. He added that the CBDC should be available across every payment platform and should also be able to do anything cryptocurrency can do, without the associated risks. With more and more countries exploring the potential of a digital rupee, India has entered into pilot testing with over 50,000 users and 5,000 merchants who are now accepting the digital rupee as payment.
Central Bank Governor Shaktikanta Das believes the CBDC is the currency of the future and recently recommended a complete ban on cryptocurrencies, citing their speculative and volatile nature as a key reason why they should not be allowed to operate in India. The Reserve Bank of India (RBI) is also concerned that emerging technologies such as cryptocurrency pose risks to India’s financial stability, monetary system, cyber security, consumer protection and market integrity.
The RBI has been working closely with regulators from other countries to develop a framework for CBDCs that will meet global standards. As part of this effort, the RBI has expressed interest in creating a digital version of the rupee in collaboration with other central banks and stakeholders. This would allow global traders to use the digital rupee when conducting transactions in multiple currencies. It remains to be seen if this plan will come to fruition but the RBI is actively exploring ways to make it a reality.
India’s central bank, the Reserve Bank of India (RBI), is making strides toward a digital revolution by introducing a central bank digital currency as an alternative to cryptocurrency. This move by the RBI official will provide citizens with a more secure and regulated means of trading digital assets, while also promoting financial inclusion and creating a more efficient and accessible economy. This new innovation is sure to revolutionize the country and have lasting implications for the future.
