RBI Executive Director Claims CBDC is an Alternative to Cryptocurrency
The Reserve Bank of India (RBI) Executive Director Ajay Kumar Choudhary has said the central bank digital currency (CBDC) of India is an alternative to cryptocurrency. He proclaimed that the digital rupee must possess all the attributes of physical currency.
CBDC Must Possess Attributes of Physical Currency
In
an interview with CNBC-TV18 on Friday, the Reserve Bank of India (RBI)
Executive Director Ajay Kumar Choudhary provided updates on central bank digital currency (CBDC).
The
RBI is exploring the offline functionality of the digital rupee, said the
executive director. He explained that the CBDC will soon become a medium of
exchange in India, and it needs to have all the features of physical currency.
Chowdhury previously said the design of India’s CBDC will be the least
disruptive and will not replace physical currency or the current financial
system.
The
RBI executive director told the news channel that the digital rupee will
provide the public with a digital form of money and is an alternative to
cryptocurrencies. His statement reiterated RBI Deputy Governor T. Rabi Sankar’s
recent claim that the digital rupee should fulfill the needs of the cryptocurrency
without its associated risks.
CBDC Functions like Physical Currency Notes
The
central bank of India began piloting its digital rupee in the wholesale sector in November and in the retail sector in December last
year. Reliance Retail became the first retailer to accept digital rupees. The
RBI deputy governor revealed last month that the digital rupee has over 50,000
users and is accepted by 5,000 merchants.
RBI
Governor Shaktikanta Das said in December last year that the CBDC is the
currency of the future. He clarified that India’s existing instant real-time
payment system, the Unified Payments Interface (UPI), relies on banks as
intermediaries, whereas a CBDC functions more like physical currency notes with
an automated sweep in and out feature.
Meanwhile,
the RBI continues to recommend a complete ban on cryptocurrencies,
including bitcoin and ether. Das has warned that crypto poses major risks to India’s financial stability, monetary system, and cyber security.
Moreover, he cautioned that it could undermine the authority of the
central bank.
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is your take on the claims of the RBI executive director on the digital rupee?
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