Now there will be no need to carry cash in pocket and there will be no compulsion for online payment through any third party app. Today India’s retail digital rupee is going to be launched. The Reserve Bank of India (RBI) has announced plans to launch it as a pilot project. Let us tell you that before this, the Reserve Bank of India has started the Central Bank Digital Currency (CBDC) in the country on an experimental basis from November 1.
Not only India, CBDC is currently being worked on in almost half the countries of the world. Let’s understand, what is this currency, how it works and which country has progressed so much in this innovation.
What is central bank digital currency(CBDC) ?
The electronic currency issued by the central bank of a country is called CBDC. It is used in place of physical currency. Its value is also maintained by the central bank in the same way as physical currency.They are issued by the central bank because it is the bank that is responsible for the supply of money in a country, monitoring it and making monetary policy. CBDC will not be a substitute for physical currency, but will be used as a complement to it.
How safe is digital currency?
It is considered safer than private digital currencies such as bitcoin because a CBDC is a state-issued currency. According to the World Economic Forum (WEF), people make digital payments more than cash. They can keep the CBDC in a bank account or as an electronic token in mobile phones, prepaid cards and digital wallets.The European Central Bank says that this will give people more payment options.According to the WEF, CBDCs can be a widespread problem due to digital theft and network outages.
These will be the benefits of digital currency
According to a World Bank report, 1.7 billion adults worldwide do not have a bank account.This makes it difficult to eradicate poverty and include them in the financial structure. CBDC will help in this.The International Monetary Fund says that CBDC can prove to be a good option in the event of a natural disaster, payment failure and cash shortage.Economic crimes will be curbed. CBDC will promote transparency in transactions.
When did it start in which country?
Bahamas: Digital currency launched here in October 2020 in the form of Sand Dollar.China: First major economy to launch CBDC pilot project in 2020.Uruguay : Despite the success of the pilot project of e-peso digital currency in the year 2017, it has not yet been launched.UK: CBDC yet to be issued despite risk assessment