Mumbai – On Friday, the Reserve Bank (RBI) released a concept note announcing the e-Rupee. It has been mentioned that the pilot project of ‘Central Bank Digital Currency-CBDC’ will start soon. However, the Reserve Bank has revealed that this new digital currency of the country will not be a substitute for the currently used currency but an additional payment system. The concept note also expressed confidence that this will strengthen the country’s digital economy and stop money laundering.
The central government had announced that digital currency would simultaneously be launched with the budget for FY 2022-23. Accordingly, the pilot project will be started soon, the Reserve Bank explained. Its use will be limited to a few sectors in the early days. Reserve Bank has said that its scope will be expanded in future. However, this digital currency will not replace the existing currency in the system but will act as a complement to it. RBI has also claimed that this will make the current payment system more efficient.
RBI has assured in its concept note that this new digital currency will be affordable, accessible, easy to use, efficient, reliable and secure. In addition, India and other countries seem to take steps in this direction. Central banks of around 60 countries worldwide have taken initiatives for digital currency, and some have also begun using it to a limited extent. India has also taken steps on this front and has seen it as the future currency. It is believed that this could broaden the base of the digital economy.
Reserve Bank released this concept note to increase awareness about digital currency in such a situation. The Reserve Bank has said that this CBDC system is being launched keeping in mind the needs of today’s time of modern economy. The CBDC would initially be categorised into two phases. CBDC-R will be used for retail, while CBDC-W will be used for wholesale. It can be used only by some financial institutions in the initial phase. By giving such information, the Reserve Bank has expressed the belief that the country will hugely benefit from this in the future.
Mainly, the threat of counterfeit currency, as well as money laundering and misuse of money, all these things can be prevented by using digital currency. Not only this, but this new currency system will be compatible with modern times, as claimed in the concept note of the Reserve Bank.
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