RBI Executive Director Ajay Kumar Choudhary on Wednesday said digital currency will further strengthen the digital economy, make payment systems more efficient and reduce the cost involved in managing physical cash. Also, it will further contribute to financial inclusion, he stressed.
He made this statement while addressing an outreach seminar on ‘Central Bank Digital Currency: The India Story’ organized by the Reserve Bank of India.
The event was organized ahead of the two-day International Financial Structure Working Group meeting of the G20 to be held here on January 30 and 31.
central bank digital currency
RBI has launched CBDC (Central Bank Digital Currency) pilots in the wholesale and retail sectors last year. Chowdhary said that CBDC is just a digital form of physical currency and will have all its features.
It is non-profitable that it carries no interest like any other currency, Chowdhury said, adding “e-Rupee is also expected to offer features of physical cash like security and settlement of transactions.”
Stating that digital currency is intended to complement rather than replace existing forms of money, he said, “It should not be taken as a step to replace any existing payment bouquet that we already have.” is available.”
He added that among other things, the main motivations for exploring CBDC issuance in India include the move towards a digital economy, reduction in production and operational costs involved in physical cash management, which come down by 10-15 per cent, financial inclusion. Despite the promotion is huge. , Adding efficiency to the settlement system, fostering innovation in the cross-border payments space.
“Backed by India’s state-of-the-art payment system that is affordable and accessible, convenient, efficient, safe and secure, a CBDC can drive the digital economy, make monetary and payment systems more efficient and contribute to Further financial inclusion,” he stressed.
He also called for future ideas that offline functionality form one of the fundamental ideas for the design of e-rupee as it is the defining characteristic of physical currency.
“Apart from ensuring wider usage, offline transactions in remote locations will be beneficial. We are in the process of exploring the technical feasibility of various available options,” he said.
Referring to the launch of pilots of CBDCs in the wholesale and retail sectors, Chowdhary said that the RBI is currently working towards a phased introduction of CBDCs through various phases of pilots culminating in the final launch.
He said that the introduction of digital rupee is a historic milestone in the evolution of money.
He added that a CBDC for retail is a general-purpose currency, targeting individuals and demonstrating the freely accessible characteristics of cash in digital form, while a CBDC for wholesale limits to a predefined set of users such as financial institutions and corporates. accesses.
RBI ED said that during 2022 the work on digital currency gained more momentum. Currently 115 countries representing 95 percent of global GDP are exploring digital currency, he said, adding about 60 countries are in advanced stages of exploration that are in the development, pilot or launch stage. He said that 18 out of G20 countries are exploring it, in which seven countries including India are already at experimental level.
(with PTI inputs)