Central Bank Digital Currency or CBDCs have captured the imagination of central banks around the world. The Reserve Bank of India RBI has launched the pilot project ''digital rupee, and reports suggest that it may expand the project based on the learnings from the current pilot. Governor Shaktikanta Das' recent statement on CBDC adoption indicates that the digital rupee may get a boost.
He said at a recent event that digital currency can help save logistic and printing costs because central banks issued digital currencies are the future of money.
Kamlesh Nagware, CTO at Snapper Future Tech, said that CBDC will be a topic of discussion in this year's budget. He believes that Finance Minister Nirmala Sitharaman may announce measures to enable offline, cross-border payment and digital asset ecosystem for CBDCs.
The Government of India has a vote on the issue of CBDCs. In her last budget speech, Ms Sitharaman said that the digital rupee will lead to a more efficient and cheaper currency management system.
CBDCs are the digital version of the official currency that is backed by the central bank. They are backed by the digital rupee, as is the case with the digital rupee.
In the trial phase of CBDC, 16,000 users made e-rupee transactions in a single month. Amogh Tiwari, Founder of DayFi, believes that the beginning is excellent and holds enormous potential for the future of e-rupee.
In the coming years, the Ministry of Electronics and Information Technology will release a 'National Strategy onBlockchain' in December 2021, and experts believe that it's likely that it will get a lot of momentum in the coming years. This report mentions the idea of a government-backed digital currency wallet for transactions in the farm sector.
According to Mr Tiwari, "We expect proper allocation forBlockchain and its application on Indian infrastructure like cargo, finance, digital documents, etc. in this year's budget.
CBDCs are considered the most well-known use case of the technology, which is considered safe, trustworthy, and transparent. Any discussion on CBDCs is incomplete without comparison with criptocurrencies, which are also run on the principles of blockchain.
The future of the Indian crypto market is in limbo with the RBI governor calling cryptocurrencies nothing but gambling while the Finance Minister wants an outright ban and the Finance Minister calling for an outright ban on the currency.
There is no relationship between criptocurrency and CBDC. Nagware says that the government will focus on the latter as an alternative. Tiwari also speaks on similar lines and adds that CBDCs are a significant step in the adoption of the digital ledger.
Both believe that the digital rupee will help in larger adoption and mainstreaming of digital currencies in general across the country. E-Rupee will help to build stronger regulations because the government and stakeholders will have a better understanding of digital currency and digital assets, says Mr Nagware.
According to one estimate, digital assets such as CBDCs and other digital assets can help India add $1 trillion to its economy by the year 2032.