RBI Executive Director Claims CBDC is an Alternative to Cryptocurrency

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.

What is your take on the claims of the RBI executive director on the digital rupee? Please post your comments.