• India’s central bank, the Reserve Bank of India (RBI), has revealed that 50,000 users and 5,000 merchants are now using its central bank digital currency (CBDC).
• The RBI plans to add five more banks to the pilot soon and 770,000 digital rupee transactions have been processed.
• RBI Governor Shaktikanta Das has warned that cryptocurrencies are a risk to the country’s financial system and will cause the next financial crisis if they are not banned.
Digital Rupee Usage in India
India’s central bank, the Reserve Bank of India (RBI), has revealed that 50,000 users and 5,000 merchants are now using its central bank digital currency (CBDC). Digital rupee transactions are currently processed by eight banks, with five more banks set to join the pilot soon. Reserve Bank of India Deputy Governor T. Rabi Sankar stressed that the RBI is going slowly with this initiative in order “to prevent taking actions without a full understanding of their potential impact.” Retail giant Reliance Retail recently announced it would accept payments in digital rupees at its Freshpik stores across India.
CBDC Adoption Around The World
According to the Atlantic Council’s CBDC tracker, 114 countries representing over 95% of global GDP are currently exploring a central bank digital currency. This shows how CBDCs could become increasingly widespread as governments look for new ways to improve access to banking services and reduce costs associated with traditional payment systems.
RBI’s Stance On Cryptocurrencies
The Reserve Bank of India has continued to recommend a complete ban on cryptocurrencies such as bitcoin and ether despite an increasing interest in CBDCs around the world. RBI Governor Shaktikanta Das has warned that these coins present a risk to the country’s financial system and could cause a financial crisis if they are not banned. He also said last month that „cryptocurrency does not have any underlying value.“
Potential Benefits Of Using A CBDC
Using a CBDC could provide benefits for both individuals and businesses such as improved access to banking services; faster payments; better security; improved transparency; reduced transaction fees; greater control over funds; and more accessible international payments. For example, those living in rural areas or underbanked communities may benefit from easier access to banking services through use of a CBDC instead of relying on cash or other traditional payment methods which require physical presence or infrastructure such as ATMs or branches.
Central Bank Digital Currencies (CBDCs) offer numerous potential benefits for both individuals and businesses but must be implemented carefully so as not to create any unintended consequences or risks for users or markets. The Reserve Bank of India is proceeding cautiously with its own CBDC project while still warning against cryptocurrency usage within the country due to potential risks it poses for financial stability.