CBDC- CHALLENGES, AND

BENEFITS IN INDIA

BY SOFIA
 WHAT IS CBDC(E-RUPEE)?
Digital Rupee, also known
as e Rupee, is electronic
money. It operates as a
form of digital currency
issued and controlled by
the Reserve Bank of India
(RBI), using blockchain or
distributed ledger
technology for secure and
transparent transactions.
Motivations for issuing CBDC in
India
The motivation behind the issuance of a CBDC
in India is to modernize the payment system,
promote financial inclusion, and enhance the
efficiency of transactions. By introducing a
digital currency like the e-rupee, the government
aims to provide a secure, convenient, and cost-
effective means of payment for individuals and
businesses. It can also help in reducing the
reliance on cash, promoting digital transactions,
and enabling financial services for those who
are unbanked or underbanked.
WHAT ARE THE CHALLENGES
OF CBDC IN INDIA?
 Digital Literacy – India had a rank of 73 out of 120
countries for internet literacy (2021). A high level of
digital illiteracy is the biggest challenge and hindrance to
the success of CBDC in India.

 IMPLEMENTING CBDC IN RURAL AREAS-

Implementing the e-rupee in rural areas could present
some unique challenges for the RBI. One major
challenge would be the limited access to technology and
internet connectivity in these areas. Providing the
necessary infrastructure and ensuring widespread
availability of digital devices and internet access would
be crucial.
Scalability issue- One of the key challenges is ensuring that
the CBDC system can handle a high volume of transactions
efficiently and without delays. India has a vast population
and a digital economy that is expanding rapidly. One major
challenge is scalability, as networks can struggle to process
large volumes of transactions simultaneously.
Making people shift to CBDC- Making people aware of
CBDC could be huge challenge . Many people, specially in
rural areas and older generations are more comfortable with
physical cash and may be hesitant to switch to digital
currency.
Security & privacy : E-Rupee can gather private user
information and payment information on a large scale, which
raises privacy and security concerns. This information can
easily be used by malicious hands to track citizens' private
businesses. which can result in the loss of funds or sensitive
information. The impact of CBDCs on privacy is vast, as
they can be used to track individuals' financial activities.
BENEFITS OF CBDC
COST AND TIME EFFICIENCY
TRANSPARANCY AND
ACOUNTABILITY
CONVENIENCE AND
ACCESSIBILITY
ENHANCE SECURITY
ENVIRONMENTAL SUSTAINABILITY
IMPLEMENTING MONETARY
POLICY
Thank you