The central bank of India supports the basic form of CBDC as an alternative to cash

In a report released yesterday, the Central Bank of India has clarified the benefits of the central bank’s digital currency and its possible future in India.

The report pointed out that “in its basic form, the Central Bank Digital Currency (CBDC) provides a safe, reliable and convenient alternative to physical cash. According to different designs, CBDC can also be a complex form of financial instrument.”

The Reserve Bank of India supports CBDC for efficient cross-border payments, and they are seen as a substitute for future correspondent banks .

In addition, according to the Trend and Progress Report of the International Bank of India on December 28, “In view of the dynamic impact of CBDC on the formulation of macroeconomic policies, it is necessary to use a basic model to conduct a comprehensive test to reduce its impact on monetary policy and the banking system. lowest.”

However, this is not just an electronic rupee. The regulator also raised some key issues that must be resolved before the electronic rupee makes its debut.

The report states that “ measurement of the scale of issuance/distribution will also help determine the appropriate basic technology most suitable for handling this type of business ”

In addition, some decisions must be made around the retail and wholesale options. On this basis, the Bank of India also discussed the distribution structure of CBDC in India. For example, is RBI the only institution that can directly issue digital currencies, or can commercial banks also participate?

That being said, previous reports stated that the Reserve Bank of India plans to explore wholesale and retail CBDCs, citing the words of T. Rabi Sankar, Deputy Governor of the Reserve Bank of India.

T. Rabi Sankar said, “We have done a lot of work on CBDC-based wholesale, while retail is a bit complicated and requires more time. We will conduct tests to prepare.”

At the same time, the recently concluded winter meeting of the Indian Parliament exposed the electronic rupee plan of the Reserve Bank of India. The Central Bank has submitted a CBDC proposal to Parliament. In addition, it is reported that it has been formulating a “phased implementation strategy” to introduce central bank digital currency to Indian users .

The report pointed out that this was done to expand the scope of the application of the rupee without having a major impact on the financial market.

However, behind this news is the Bank of India’s tough stance on private crypto such as Bitcoin. India seems to be seeking a stricter regulatory framework, and the implementation of its CBDC will deserve our attention.

The original text comes from ambcrypto, compiled and compiled by Blockchain Knight, the English copyright belongs to the original author, please contact the compiler for Chinese reprint.

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