On July 11, in Mumbai, a top official from the Reserve Bank of India (RBI) revealed that the central bank aims to achieve a target of one million transactions per day using the central bank digital currency (CBDC) by the year’s end.
The RBI has conceptualized the e-rupee as a digital replacement for physical cash, utilizing blockchain distributed-ledger technology.
As of June 2023, there are 1.3 million customers and 0.3 million merchants actively utilizing CBDC, according to RBI Deputy Governor T Rabi Sankar’s speech. The central bank’s vision for CBDC extends beyond being merely a payment instrument; they intend for it to function as digital currency, requiring a distinct strategy to encourage its use among customers.
Sankar emphasized the importance of maintaining transaction anonymity under CBDC. He also highlighted that CBDC’s primary advantage would arise from facilitating cross-border transactions.
Last year, the RBI initiated experiments involving both wholesale and retail versions of the e-rupee, employing blockchain distributed-ledger technology as an alternative to physical currency.
While some bankers had expressed reservations about the project, considering CBDCs similar to internet-based banking transactions and seeing Unified Payments Interface (UPI) as a robust competitor for retail e-rupee usage, Sankar clarified that the central bank doesn’t plan to incentivize CBDC and that it isn’t in direct competition with UPI.
Source: Reuters
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