India is all set to launch the Central Bank Digital Currency, or CBDC, which is a digital currency, in 2023. And it looks like things are going pretty well as the Central Bank has commenced the pilot launch of the Digital Rupee on November 1, 2022.
What is Digital Rupee?
Digital Rupee is also known as Central Bank Digital Currency (CBDC), in simple terms you can think of it as digital currency notes going to be issued by RBI. The only difference between the physical and digital banknotes will be their production cost, ease of use and lightning-fast transferability.
Here’s The List of Ten Points Regarding The First Pilot Launch of the Digital Rupee From RBI:
Central Bank Digital Currency or CBDC, will be a digitized form of fiat currency, which is fully trusted and backed by the Government. Not like cryptocurrencies which are not trustworthy yet.
The aim to launch Digital Rupee is to create a potentially manageable currency system with higher value. “ It will be used alongside existing forms of money enabling financial inclusion and implementation of monetary and fiscal policies”, mentioned Business Today.
There are exemplary countries, China and Hong Kong, which have already launched their digital currencies which are fully operational.
In India, on the basis of need, the digital currency will be passed down for general use as per two segments-retail and wholesale. The digital rupee launched for the wholesale segment will be restrictedly available for the financial institutions for bulk use and the retail segment will be available for consumers and business organisations.
Digital Rupee’s “settlement in central bank money would reduce transaction costs as being a sovereign currency it ensures settlement finality and thus reduces settlement risk in the financial system.”
After this first pilot launch, this digitised currency will be available for retail use within a month, but for the selected close customer groups.
Nine banks including State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC participated in the pilot launch.
With our digital currency, people will not have to risk their money cryptos and the transactions will be risk-free.
A few years after the complete launch of the Digital Rupee for both the retail and wholesale segments, the currency will likely serve as the risk-free medium of cross-border payments.
Also read:
For All Taxpayers, Govt To Commonized All The Different ITR Forms Except ITR-7
“The total expenditure incurred on security printing from April 1, 2021, to March 31, 2022, was Rs 4,984.80 crore This cost of printing money is predominantly borne by four stakeholders –the general public, businesses, banks, and the Central Bank. CBDC will reduce the operational costs e.g. costs related to printing, storage, transportation and replacement of banknotes, etc.”
