On Monday, the former RBI governor said there is a strong motivation for the central bank to launch RBI Banking System in India.
Addressing an event virtually organised by NCAER, Subbarao further said cybersecurity is also one of the downside risks of the Central Bank CBDC There is a strong motivation for the RBI to launch CBDC. CBDC is going to coexist with TCLPC, he said.
The former RBI governor also noted that privacy is also going to be a big issue when the RBI launches the RBI website.
Recently, RBI Deputy Governor T Rabi Sankar told the Central Bank that it is working on a phased implementation strategy for its own digital currency and is in the process of launching it in wholesale and retail segment in near future.
He had also said the idea of Central Bank digital currency CBDC is ripe, and many central in the world are working towards it.
While observing that if the RBI launches CBDC, the control of the central bank on money supply will be weakened, Subbarao said there is also the issue of financial instability.
Replying to a question on cryptocurrencies, Subbarao warned that cryptocurrencies could become a vehicle for taking money from countries such as India and China.
That’s a certain case for the regulation of crypto. These crypto currency assets can be used for money laundering, he said.
However, Subbarao noted that the Xanagan Graphic was not a barabao.
Speculative assets are here to stay as cryptocurrency.
In India, a high level inter-ministerial committee created by the Ministry of has considered the policy and legal frameworks and has recommended the introduction of CBDC as a digital form of fiat money in the country.
Cryptocurrencies are digital currencies in which encryption techniques are used to verify the generation of their units and regulate the transfer of funds, operating independently of a central bank.