Thursday, December 8, 2022
HomeDigit NewsE-rupee will also be linked to UPI, different digital currency may come...

E-rupee will also be linked to UPI, different digital currency may come for retail-wholesale

RBI Digital Rupee India: The Central Reserve Bank (RBI) on Friday issued a concept note or draft paper for the launch of Digital Rupee. RBI says that it is going to launch a pilot project of Digital Rupee – Central Bank Digital Currency (CBDC) on the lines of digital currency soon. RBI is going to launch Digital Rupee as a stage-by-stage digital currency in the coming times. Now it will start as a pilot project in the first phase. RBI will keep an eye on its use and scope, according to that it will gradually expand.

What is Digital Rupee
Let us tell you that the pilot project for RBI’s Digital Rupee CBDC (Central Bank Digital Currency) will start soon. People of different ages and different fields will be involved in this. On the basis of the results obtained from the pilot project, the final launch of Digital Rupee will be done.

CBDC will come separately
According to RBI sources, there will be a separate CBDC for retail and wholesale, retail CBDC can be used for payment, settlement. Whereas the wholesale CBDC will be issued for large financial institutions. Token based CBDC for retail is possible. At the same time, account based CBDC can be brought for wholesale. Efforts will be made to maintain confidentiality in retail CBDCs.

Understand how CBDC will work like this

    • Customers will not get any interest on CBDC.

 

    • The launch of CBDC is possible only on denominated currency.

 

    • In theory, the digital rupee can be converted into cash.

 

    • Will be linked to the existing UPI based payment system.

 

    • In the event of a hack, there will be a recall feature, a recovery feature.

 

    • The system for redressal of complaints will be strengthened.

 

    • There should also be a limit on how many CBDCs one can hold.

 

    • It is possible that bank account condition may not be imposed for CBDC.

 

    • It is not clear that the monetary policy will have a bad effect.

 

    • It will be decided whether the anti-money laundering rules are followed.

 

    • Direct, indirect model of issue is discussed.

 

    • In direct, all the responsibility will be with the Reserve Bank.

 

    • At the same time, banks, other institutions can also have a role in indirect.

 

What are the advantages of digital currency

    • Digital currency will reduce the cost of currency management.

 

    • 4,984 crore will be spent on printing the note in FY22.

 

    • This will reduce the risk of settlement.

 

    • Ease of use for customers

 

    • Entrepreneurs will be able to bring new tech products.

 

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