India had announced its desire to launch a digital currency. Now, the Reserve Bank of India (RBI) is showing its readiness to pilot this currency called digital rupee. According to the presentation of the RBI, the future CBDC will have a certain particularity. Here is how the digital rupee will be different from other cryptos.
RBI promises more speed and efficiency
The RBI is working gradually to get to launch the digital rupee as soon as possible. On October 7, she has published a note presenting its digital currency project. According to the document, “the digital rupee will be an additional option to the currently available forms of money“. The RBI added that e-rupee is “notnot fundamentally different from banknotes, but being digital it will probably be easier, faster and more efficient“.
Furthermore, for the RBI, a CBDC must be accepted as a means of payment. It is legal tender and a safe store of value. Furthermore, “CBDCs appear on the liabilities side of a central bank’s balance sheet“. The RBI has indicated that it does not want his digital currency to earn interest. The idea is to prevent users from withdrawing funds from banks to turn them into digital currency. If this happens, it could disrupt India’s banking system and economy.
Features of CBDC of India
The digital rupee will not be private in nature like regular cryptos. Indeed, it will be totally issued and controlled by the RBI. Users will be able to store it in an electronic wallet provided by the RBI itself or a registered provider.
Moreover, the future CBDC of India should be available in two forms : wholesale and retail. The first form is dedicated to interbank settlements. The second form is designed for the public. Commercial banks will be able to distribute the crypto to consumers.
However, the project remains critical by many local players in the sector.
According to Reserve bank of India, transactions related to the digital rupee will not be completely anonymous. Transactions involving a small amount will take place anonymously. On the other hand, users’ personal information will be disclosed for high-value transactions.
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