RBI on Friday, October 7, indicated the commencement of the launch of the e-Rupee on a trial basis for specific uses. This is being done in a way for its various advantages it comes with right from regulating money laundering, making the payment system efficient, and also promoting India’s mission of Digitalisation.
Referring to Central Bank Digital Currency (CBDC), RBI said that these were not replacements for the current payment system, rather they will be complementary ones. With this, users will get an additional payment avenue to make their payments.
About CBDC (Central Bank Digital Currency)
CBDC, in simple terms, refers to the digital form of currency notes which is issued by central banks of the countries. With the development and technological advancement, the issuance of CBDC began to be felt. Countries across the world are exploring a way to its issuance in their country. Also, whether it would be issued or not will be specific to the country’s specific requirements.
CBDC Launch In India
With respect to the CBDC launch in India, the Digital currency launch was mentioned in this year’s Union budget presented on Feb 1, 2022, for the current year 2022-23. Hence, it was already proclaimed by the Government in India. The central bank said: "The Reserve Bank will soon commence pilot launches of E Rupee ? for specific use cases. As the extent and scope of such pilot launches expand, RBI will continue to communicate about the specific features and benefits of the E-Rupee, from time to time."
Classification of CBDC
CBDC is classified into two broad types -- general purpose or retail (CBDC-R) and wholesale (CBDC-W). The difference between the two are- Retail CBDCs are for being used by all. While wholesale CBDCs are made for restricted access and a user needs to select financial institutions for using it.
The concept note on CBDC, said the incorporation of all the features like anonymity, finality, and universality is a requisite for CBDC to function as a medium of exchange. A watershed moment in the evolution of currency that will alter the very nature of money and its functions, the central bank said.
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