India CBDC Competes with Cryptocurrency
Central Bank Digital Currencies (CBDCs) are digital versions of traditional fiat currencies, issued by the central bank of a country. India has recently entered into the realm of CBDCs as its government seeks to launch a national digital currency in order to increase financial inclusion and reduce costs associated with using cash. In doing so, it is competing directly with cryptocurrency which currently dominates many aspects of India’s economy.
Cryptocurrency is decentralized and independent from any government or central banking institution, making it less susceptible to interference or manipulation by third-parties such as banks or governments. The main appeal for users lies in this independence and lack of censorship when compared with traditional payment systems that require permission from parties before transactions can be completed. This freedom has made cryptocurrency popular among individuals looking for alternative ways to make payments or store value outside the control of their governing body.
With the introduction of its own CBDC however, India is now competing directly against these forms of decentralized money through offering its citizens an alternate way to store value digitally without having any involvement from third-party entities such as banks or other institutions providing similar services like cryptocurrencies do today. The Indian Government hopes that this will encourage more people within the country who have previously been excluded from access to banking services due to cost constraints and lack geographical proximity, enabling them instead use a secure form of digital money backed by their nation’s Central Bank – Reserve Bank Of India (RBI).
It remains unclear how successful this move will be at encouraging people away from existing forms crypto currency but time will tell if this project succeeds in widening access for those previously unable to participate in online commerce safely and securely while still allowing them autonomy over their finances completely independently from any governmental entity involved in controlling traditional fiat currency markets worldwide today.
