Central Bank Digital Currency or CBDCs have captured the imagination of central banks around the world. The Reserve Bank of India RBI recently launched the pilot digital rupee' project 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.
Adoption of digital currencies can help save logistic and printing costs, he said at a recent event.
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. Ms Sitharaman said that digital rupee will lead to a more efficient and cheaper currency management system.
CBDCs are the digital version of the official currency, backed by the central bank. They are very often backed by the digital rupee, as is the case with the digital rupee.
In the CBDC trial phase, 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.
Experts believe that the Ministry of Electronics and Information Technology will come out with a National Strategy onBlockchain in December 2021, which is likely to 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.
In this year's budget, we expect proper allocation for the use of digital documents, cargo, finance, digital documents, etc., according to Mr Tiwari.
CBDCs are considered the most well-known use case of the technology, which is considered safe, trustworthy, and transparent. Any discussion on CBDCs would be incomplete without their comparison with criptocurrencies, which are also run on the principles of blockchain.
The future of the Indian coin market remains in limbo due to the RBI governor calling it nothing but gambling and Finance Minister seeking an outright ban on the currency while calling for an outright ban on the currency.
There is no relationship between criptocurrency and CBDC. The government will focus on the latter as an alternative, says Mr Nagware. Tiwari says that CBDCs are a significant step in the adoption of the digital ledger.
Both believe that the digital rupee will help in the adoption and mainstreaming of digital currencies in general across the country. E-Rupee will help to build stronger regulations because the government and stakeholders could have a good understanding of digital currency and digital assets, says Mr Nagware.
One estimate believes that adopting digital assets like CBDCs and other blockchain-backed assets can help India add $1 trillion to its economy by 2032.