Digital Rupee to launch in 2022-2023 by RBI: The Reserve Bank of India(RBI) is all set to launch Digital Rupee in 2022-2023. The RBI’s Digital Rupee is known as the Central Bank Digital Currency(CBDC). The Digital Rupee is likely to be introduced in phases. In the present financial year, the concept of CBDC can be applied in wholesale businesses. Digital Rupee has been more in the news since Finance Minister Nirmala Sitharaman mentioned it during her Union Budget 2022 speech focusing that it will be launched in 2022-2023. To know in detail about the Central Bank Digital Currency(CBDC) aspirants must read the article discussed below.
What is CBDC?
CBDC is a digital or virtual currency that is the same as a fiat currency. The full form of CBDC is Central Bank Digital Currency. The regulation of CBDC is done by the Central Bank of the country. Central Bank Digital Currency can be used for payment purposes, a unit of account and can be stored as a value. It is a digital payment instrument that can be stored, transferred, and transmitted by all kinds of digital payment systems and services.
The features of Central Bank Digital Currency(CBDC) are:
- CBDC will use Blockchain Technology.
- Digital Avatar of India’s Fiat Currency.
- Can be exchangeable with the fiat currency.
- Each unit of CBDC can be identified uniquely.
- CBDC is speculative in nature and are thus volatile.
Central Bank Digital Currency: Benefits
The Introduction of Central Bank Digital Currency will provide significant benefits to the people. Some of the benefits are listed below.
- More efficient than printing
- Reduction in Transaction Risks
- Prevents Money Laundering
- No discrepancy in Tax Collection
- A user can perform domestic as well as International Transactions without the involvement of a bank or third party.
- People will be less dependent on cash.
- CBDC will prove to be more robust, efficient, trusted, regulated and legal tender-based payments option.
CBDC in India
Through CBDC real time payments without any inter bank settlement can be done in India. The currency-to-GDP Ratio in India is high and India is growing in terms of digital payments. People now-a-days mostly prefer digital mode of payment. At present for small amount of transactions the most referred medium is cash but introduction of Central Bank Digital Currency(CBDC) can replace it to some extent. The price of Currency Management will get reduced by the arrival of an official digital currency, CBDC.
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FAQs: Digital Rupee to Launch in 2022-2023 by RBI
Q.1 What is Central Bank Digital Currency(CBDC)?
Ans. Central Bank Digital Currency(CBDC) is a highly securitized digital or virtual currency that can be used for payment.
Q.2 Which technology is used in CBDC?
Ans. The CBDC are backed up by Blockchain Technology.
|Current Affairs April 2022|