A digital form of currency notes issued by a central bank, Central Bank Digital Currency (CBDC) has been garnering fame all around the world, and the executive director of the Reserve Bank of India, Ajay Kumar Choudhary is the latest chairholder to have spoken on the digital token on Thursday.
According to the RBI ED, the CBDC will complement physical currency, clarifying that it will not be replacing the latter.
He said that the central bank-issued digital token will promote financial inclusion in the country, while boosting innovation in the cross-border payment space and improve the efficiency of cash management.
Addressing the interactive session on ‘Digital Rupee: A Way Forward’, organised by the members of PHD Chamber of Commerce and Industry (PHDCCI), Choudhary said that currently 95 countries are exploring the creation of a CBDC.
He informed that about 50 countries were at an advanced stage in the terms of CBDC, adding that over 90% of G20 countries planned to launch the CBDC for their respective countries. These G20 nations included Russia and South Africa.
The Indian central bank’s ED also assured about the safety of CBDC, underlining that the responsibility lay in the hands of the central bank.
He believes that the CBDC will keep the users protected from the risks of private cryptocurrencies, thereby filling the strategic space. This comes as the central bank has advocated its stand against the safety parameter of private cryptocurrencies.
Choudhary said that the digital rupee will ensure consumer protection and avoid damaging social and economic consequences, adding that RBI will initiate steps that will assure that the CBDC issued follows adequate safeguards in building a system which is inclusive, competitive and responsive to innovation and technological changes, cited reports.
The ED added that the non-remunerative nature of CBDC could lead to lowering disruption and work towards aiding the monetary policy.
