An official from the Reserve Bank of India (RBI), India’s central bank, said the country’s central bank digital currency (CBDC) will serve as an alternative to cryptocurrencies. He stressed that the digital rupee must possess all the attributes of a physical currency, including anonymity.
India’s CBDC Update
Reserve Bank of India (RBI) Managing Director Ajay Kumar Chowdhary provided several updates on India’s central bank digital currency (CBDC) during an interview with CNBC-TV18 on Friday.
India’s central bank is exploring offline capabilities for the digital rupee, Choudhary informed, noting that CBDC will soon become India’s medium of exchange and stressing that it must have all the features of a physical currency, including anonymity The RBI managing director had earlier said that said that the design of India’s CBDC 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 people with money in digital form and act as an alternative to cryptocurrencies. His statement echoes RBI Deputy Governor T. Rabi Sankar’s recent assertion that the digital rupee can do anything a cryptocurrency can do, but there should be no risks associated with cryptocurrencies.
India’s central bank began piloting the digital rupee in the wholesale sector last November and in the retail sector in December. Reliance Retail became the first retailer to accept the digital rupee. 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 last December that CBDC is the currency of the future. He clarified that while India’s existing instant real-time payment system, Unified Payments Interface (UPI), has banks as intermediaries, CBDC functions more like physical bills with automatic sweep and eject capabilities.
Meanwhile, the RBI continues to recommend a complete ban on cryptocurrencies, including bitcoin and ether, with Das warning that crypto poses significant risks to India’s financial stability, monetary system, and cybersecurity. He also warns that it could undermine the authority of the central bank.
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