While India has been trending in crypto-related news and updates for various reasons including crypto regulation, taxation, increase user onboarding, and now CBDC. Basically, CBDC is called as Central Bank Digital Currency which is the digital form of fiat currency and even in the year 2021 we have seen many news update about the same but there was no official update by govt authority or from RBI. Reserve Bank of India is a govt body that takes care of money-related things and takes new initiatives. Today while the budget announcement was going on, the CBDC also got announced and this is the first time when this is discussed officially.
Many countries are exploring CBDC because this is going to help the economy and while the world is going digital so this is also going to bring more convenience. Its not like crypto where value will fluctuate instead it will remain the same as fiat but it will provide the option to use it in digital for any online payment and transfer. There will be a wallet and we would be able to use it in digital form and since this is completely controlled by RBI so there is no risk of value loss.
CBDC stands for central bank digital currency. It is a legal tender that is issued by the central; bank in digital form.
IUts the first time when CBDC is officially announced for the first time and it has also been mentioned that they will launch it in 2023 which means this project is in progress. Earlier it was shared that RBI is not in favor of crypto but they want to have digital currency and even they would like to have their own crypto which makes no sense as CDBC will be here.
Digital fiat money will also help the country to save on the printing cost, handling expenses, and distribution which is not an easy task. We would have the option of CBDC but at the same time, there will be an option to choose either one or both. There is no such thing that once we would have digital money then the physical will be stopped instead there will be a dual option since not everyone is good with technology and the majority of people are not good in the operation of wallet compatible devices.
Its great that finally we have some official updates and this brings a new level of excitement. I am even more excited to have digital INR next year and hope I would be able to use this for buying crypto. If it happens then for sure we are going to be in an era where crypto will be purchased using digital fiat money.
Thank you so much
