The Reserve Bank of India (RBI) is moving towards launching an online rupee pilot as well as providing key characteristics of Central Bank Digital Currency (CBDC) as per an fifty-page report published on Friday.
It is reported that the Indian central bank has said it will start an initial test Digital Rupee program “soon,” and will announce its benefits and features “from when it becomes available.” A few of the important features have been revealed in a cautious manner.
The report differentiates between wholesale and retail use scenarios, for consumers, and bank-to bank transfers, as well as suggests both could be implemented.
It also provides a discussion of various options for issuing, particularly one in which wholesale CBDC is account-based that is issued by the central bank in contrast, consumers’ CBDC for consumers will be token-based and run through an intermediary.
Furthermore, RBI calls for “reasonable anonymity for transactions of small value” to adhere to an interest-free coin that is similar to the physical currency.
The technology that powers the digital rupee isn’t yet established in the stone. The RBI has left the possibility of adjusting to the technology that is decentralized as it develops.
The report examines various options and seeks to increase the public’s awareness of CBDCs, with “compelling arguments” that make a nation-wide digital currency “as appealing as cash, if there isn’t more.” However the report is cautious about risks and attempts to embark on the pilot program , step by step.
Gargi Sinha is working as Senior Journalist at Confea. She has completed her Masters in Journalism from Delhi University. She has interest in crypto and blockchain technology.