Central Bank Digital Currency

Central Bank Digital Currency (CBDC) has been in the news recently as Minister of Finance, Nirmala Sitharaman, announced that the Reserve Bank of India (RBI) will introduce India’s CBDC, digital rupee, in FY2023. CBDC refers to the digital form of a country’s fiat currency, which is issued by the central bank of the country. CBDC has evolved from decentralised digital currencies such as Bitcoin and Ethereum. According to the International Monetary Fund (IMF), around 100 countries are exploring CBDCs. They are used to make payments between individuals, between individuals and businesses or between financial institutions. What Is CBDC? It is a digital form of currency. In India, RBI will issue and supervise India’s CBDC, digital rupee. CBDC can be exchanged with the fiat currency of the country. It is a liability of the central bank. The digital currency offers the...