The RBI’s Plan to Increase CBDC Transactions
The Reserve Bank of India (RBI) aims to boost Central Bank Digital Currency (CBDC) transactions to one million per day by the end of 2023. Currently, the RBI records around 5,000-10,000 transactions daily with its retail CBDC, the e₹-R.
Key Points:
– CBDCs are digital currencies issued and regulated by a country’s central bank, backed by monetary reserves.
– The RBI plans to leverage the Unified Payments Interface (UPI) network to increase CBDC usage.
– Interoperability for CBDC customers using UPI is expected to be fully implemented by the end of the month.
– CBDCs have the potential to reduce costs for cross-border transactions.
– Stablecoins pose a threat to policy sovereignty and the use of the national currency.
Hot Take:
The RBI’s plan to increase CBDC transactions is an ambitious goal that demonstrates the growing importance of digital currencies. By leveraging existing infrastructure and addressing concerns such as cross-border transaction costs, the RBI is positioning CBDCs as a viable alternative to traditional money. However, the threat posed by stablecoins highlights the need for each country to have its own CBDC to maintain control over their currency and prevent the risk of dollarization. The RBI must also carefully consider the issue of anonymity, ensuring compliance with anti-money laundering regulations.
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