Cash in wallet now has a digital counterpart, ”THE E-RUPEE.

” From
counting coins to paper currencies to instant ATM deliveries to
moving into online realm with payment apps money has evolved
with time.
Central bank has launched the pilot programme CBDC “Central Bank
Digital Currency” with four banks SBI,ICICI,HDFC and YES Bank. CBDC
introduces E Rupee as the NEW AVATAR of money. Digital currency
has the same legal tender as of cash. Then, what’s the need of E
Rupee in the market? Physical cash can be lost easily but E rupee is
more safe in this case. E rupee will be recoverable through a pin .
Sustainability of E rupee during online payment apps!!!!!!
UPIs are ubiquitous and successfully widely used in the country. Is
there a possibility of E rupee to be a competition of UPI? UPIs are
online payment platforms with bank as a mediator but CBDC is an
extension to UPI as a complimentary to payment methods. CBDC is
more transparent and will deal with the hindrances of UPI services.
Anonymity is the biggest difference between E rupee and UPI. Banks
hold the record of UPI transactions whereas CBDC transactions will
be anonymous. CBDC transactions has no involvement of bank, it
follows wallet to wallet transfer of money. Bank only has the record
of current balance available. CBDC needs to be linked with the
savings account for transactions.
CBDC is printed blockchain currency which is traceable. It’s not
crypto currency. Crypto Currencies are investment product whereas
CBDC is only for transactions. Digital currency and cryptocurrency
might sound interchangeable but they mean different. Digital
currency is online currency whereas cryptos are a record on
blockchain database.
US DOLLAR VS CBDC:
The US dollar is by far the dominant currency for international trade.
As India is planning to trade with Russia and non-American countries
like Iran, hence India’s dependency on dollar must be reduced. Our
key focus is on whether and how CBDC could improve the efficient
US domestic payment system. CBDC is generally a digital liability of
central bank that is widely available to the general public. Cross
Border transaction will be more matured due to CBDC and it will lead
to less dependency on US dollars for the same. Through this India
can do international trade settlement in INR and this will make India
geopolitically more independent.
As UPIs are widely successful in India, it is a crucial aspect for RBI to
test for the performance and scalability of CBDC in the country.
Digital currency is keen to cyber breaches but there can be a
development of parallel industry providing e wallet security.
For the concept as new as legal tender for the digital form, the RBI
will take slow steps. As of now India is more curved than other
countries in the UPI field , let’s hope the same for CBDC. Right now
digital currency has not gained wide currency in the world, WILL
INDIA BE A PIONEER OF DIGITAL CURRENCY IN THE WORLD?