Executive Director of the Reserve Bank of India (RBI), Ajay Kumar Choudhary, while addressing PHD Chamber of Commerce and Industry (PHDCCI) members on 'digital rupee: a way forward' said that presently 95 countries are exploring a Central Bank Digital Currency (CBDC), and 50 countries are at an advanced stage. According to him, more than 90 percent of G20 countries, including South Africa and Russia are planning to launch a CBDC for their countries.
Assuring that the use of the CBDC rupee is safe, he said that it is the responsibility of the central bank. Stating that RBI is looking at a fair implementation strategy for the CBDC, he listed out several benefits of the use of digital currency reduction in operational cost, improving the efficiency of cash management, and easy cross-border payments among others.
The digital currency, according to him, also provides protection against the risks of private cryptos and will fill the strategic space. RBI has been, for a long time, against providing legality to private cryptocurrencies in the country.
Assuring the attendees about the safety, he said that RBI is fully committed to the anonymity of the CBDC and that the central bank is looking at various legal options to enable this. According to him, the non-remunerative nature of CBDC can lower disruption and is helpful for monetary policy.
Choudhary also said that the design of CBDC will be the least disruptive and will not replace the physical currency or the system. Also, CBDC Retail issuance will be identical to that of paper currency used in the country.
The attendees of the event were also informed about RBI's effort of exploring various options to enable offline transactions under CBDC that can also be used for government transfers under Direct Benefit Transfer (DBT). He requested the industry to integrate the digital rupee for wider usage.
On December 1, the Reserve Bank of India (RBI) launched the first pilot for retail digital Rupee (e₹-R) in select locations in closed user groups (CUG) comprising participating customers and merchants.
(Edited by : CH Unnikrishnan)
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