The government is creating the Digital Rupee, a digital currency issued by the central bank. What is CBDC, and why is it necessary? What impact does this have on citizens?
Finance Minister Nirmala Sitharaman stated on Tuesday that the Digital Rupee, a central bank digital currency (CBDC), will be launched in 2022-23.
Who will be the first to launch the CBDC?
The CBDC will be launched by the Reserve Bank of India in the coming fiscal year. This comes on the heels of the government’s intentions to build a CBDC underpinned by blockchain technology.
What exactly is a CBDC?
CBDC is a digital form of legal money issued by a central bank. It resembles a fiat money that is printed on paper and may be exchanged for any other fiat currency.
What is the need for CBDC?
According to Investopedia, the idea is to provide customers with the ease and security of digital as well as the traditional banking system’s regulated, reserve-backed circulation.
What impact does this have on citizens?
Several concepts for how the Digital Rupee could be transacted have been presented by technology professionals and evangelists, but the Reserve Bank of India’s formal announcement will most likely clarify how the Digital Rupee will be transacted by citizens. One significant difference will be that, unlike current digital payment methods, a Digital Rupee transaction will be immediate.