CBDC or Central Bank Digital Currency in simple words is like any other cryptocurrency but is centralized by the reserve bank of India.
A concept note has been released by the government of India explaining all aspects related to the new e-Rupee, in the same document, it explains why India needed a digital currency and how cryptocurrency was negatively impacting the countryu2019s economy, u201cAs the custodian of the monetary policy framework and with the mandate to ensure financial stability in the country, the Reserve Bank of India has been consistent in highlighting various risks related to the cryptocurrencies. These digital assets undermine Indiau2019s financial and macroeconomic stability because of their negative consequences for the financial sectoru201d says the official document. Source :- Zee BusinessCBDC will act as an additional option for making payments that are processed electronically. This new e-Rupee will help boost Indiau2019s digital financing sector making payments and transactions easier, faster, and cheaper.
Experts say the launch of the pilot project will help India advance in the world of virtual currencies and overall help with the countryu2019s digital economy. CBDC also makes transferring money across the border easier and eliminates the need of opening a bank account in the host country.
As of now, RBI has only launched the CBDC for the wholesale segment and plans to launch it for the retail market this month. A total of nine banks are currently selected by the Reserve Bank to participate in the pilot project, names being, The State Bank of India, Bank of Baroda, Union Bank of India, HDFC, ICICI Bank, Yes Bank, HSBC, IDFC First, and Kotak Mahindra.
