There is always some hot news related to banks and currencies in India. In the last few months, some of the banks have started testing digital currencies in India. I initially received a notice from Axis Bank and now ICICI Bank also recently sent a notice asking customers to help in testing it. The digital Rupee is going to be in circulation soon and the banks are testing them already. This is going bring a lot of change to the Indian economy I believe because the government will start pushing towards that there is also an advantage in using the digital Rupee which is the fact that there will only be a finite amount of digital Rupee in circulation and the government will not be able to print money just like that.
Today with the help of banks, we are still able to use online transaction facilities. The money we see in the bank account is just a value in one of the databases that banks are maintaining. We cannot say for sure whether the value is correct or not. Banks can technically update the balance on a particular account and reduce the balance on another account without nobody noticing it. But with the help of the digital rupee, it is not possible because everything is tracked and currencies cannot be printed just like that. I'm sure the practical implementation can take a lot of time because many people have not even started using the digital transactions that banks are offering.
I would say it is a good move by the banks but it can take a lot of time for adoption. I would say it can even take a decade or two to see some considerable amount of chance. But when the world is already moving towards cryptocurrencies, I'm not sure if this digital Rupee idea would succeed or not, or maybe this might have an integration with other exchanges and cryptocurrencies finally making everything transparent. This way at least everything would become visible and corruption could be reduced to a greater extent. These are all just hopes and we will never know the reality.
Even today although the government is pushing people towards digitalization, there are still many people using the cash economy. I have a cousin who uses cash for everything. He never believes in having the money in bank accounts or spending directly from the bank account. He would like to have control over the money he is spending so he uses cash for all his needs. It can get hard to convert this cousin and convince him to start using the digital Rupee or a digital equivalent for his needs.
Leave my cousin because he has a principle that he won't be using money in any digital format. But there are so many people in other remote places of India where even mobile phones have not reached. There are still places in India where there is no proper electricity. It can be hard to take these digital things to such remote places and I doubt even after 10 years eradicating FIAT will still be a challenge.
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