References to concept of Central Bank Digital Currency (CBDC) can be traced back to the 1980s. In the past decade this term has started gaining traction as nearly 100 countries have decided to look at it seriously and are at different stages of development. In India, the Reserve Bank of India (RBI) started progressing towards launch of CBDC with the assistance of participants ranging from Mr. Amitabh Bachchan through his famous show Kaun Banega Crorepati to a migrant fruit seller stationed outside RBI headquarters in Mumbai.
Stimulus For Recasting of Currency
Introduction of cryptocurrencies posed a threat to stability of financial markets across borders. Additionally, with mobilization of the mass campaign – ‘Digital India’, Indian citizens started moving away from cash-based transactions to digital form of transactions such as UPI. To cater to the needs and demands of the Indian financial market and for providing a sovereign alternative to third party cryptocurrencies, RBI started working towards introducing CBDC in India further expanding the digital ecosystem of the country. Successful implementation of CBDC by RBI will potentially place India at the forefront in innovation surrounding crypto assets and blockchain technology.
Please click here to read the full article by Nand Gopal Anand, Harshit Dusad, Vrindesh Patel published in ET Edge Insights.
Harshit’s focus areas are banking & finance, project finance and trade finance. His experience includes work on matters pertaining to foreign currency lending, rupee financing and security creation in relation thereto.