New Delhi: India’s central bank RBI is soon going to launch Central Bank Digital Currency or CBDC in the country. If you also want to understand about Central Bank Digital Currency, then the most important thing is that no intermediary is involved in transactions with e-currency. Transactions done through e-currency can remain confidential, as is the case with cash. Reserve Bank of India Governor Shaktikanta Das has said this after announcing the Monetary Policy Committee.
The main objective of CBDC is to make digital payments easier and safer. e-RUPI has been created by the National Payments Corporation of India in collaboration with the Department of Financial Services, Ministry of Health and Family Welfare and National Health Authority. e-RUPI has been introduced as a cash and contactless payment mode.
If you also want to know about the Reserve Bank’s Central Bank Digital Currency or e Rupee, how it can change our lives, then we are giving you detailed information about it.
Central Bank Digital Currency or CBDC is believed to bring a big change in India’s economy like UPI.
What is a CBDC?
Like any physical note, CBDC is a legal tender. In return, the Reserve Bank of India assures to pay you money. We can legally accept it. It can be freely exchanged for commercial bank money. You can understand it like a digital note.
How is CBDC different from UPI?
In UPI or Unified Payment Interface you need a bank which validates your transaction. In CBDC you do not need any bank or bank account. The time taken in settlement of currency transactions will be reduced and it can become an alternative to cash.
What is the need for CBDC?
CBDC is more secure than bank deposits. The amount up to ₹500000 kept in your bank is insured. CBDC is guaranteed by RBI and due to this the risk of loss of your digital currency amount is reduced.
What is the benefit of CBDC to the government?
CBDC or e-Rupee will reduce the government’s expenditure on physical cash management. The Government of India spends about ₹5000 crore on printing money. After the advent of CBDC, the government will get a lot of help in printing notes, keeping them, transporting them and settlement etc. Along with this, this currency will be environment friendly.
What are the other advantages of CBDC?
The use of central bank digital currency will bring about a vast improvement in the cross border payment system. India is the largest country to generate money from the world. In the year 2021, India received an amount of 87 billion dollars from abroad. The cost of getting money from abroad is very high, its speed is slow, its access is limited and there is no transparency in it. The use of CBDC will get rid of all these problems.