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The Reserve Bank of India (RBI) is keen to introduce the Central Bank Digital Currency (CBDC) in a phased manner in the country. The pilot project is expected to start soon as per the update. The impact of digital currency on the deposit mobilization abilities of the banks are verified for now. RBI is also discussing about the impact of the monetary policy. RBI Deputy Governor T Rabi Sankar told this in a statement on Thursday. He also said that conducting a pilot process in retail and wholesale segments is possible in the near future. RBI also said that they are keen to implement the digital currency in a phased manner without any disruption. Rabi Sankar made these statements during his online speech that is organized by Vidhi Centre for Legal Policy.
He said that RBI has been exploring about the advantages and disadvantages of the digital currency. The Central Bank of India will draw the lessons from other countries which are using digital currency. They would evaluate the scope of CBDCs about using them in retail and wholesale payments. A debate about the centralized ledger or the distributed ledger is evaluated. Token-based or account-based validation mechanisms and distribution architecture are discussed before the implementation of the digital currency. There are several countries that are working on CBDC and the discussion about bitcoins too has been high. The private currencies are not backed by any government and they have their own benefits.
Rabi Sankar said that if the virtual currencies get enough recognition, the national currencies which have limited convertibility will be under threat. India is the leader in digital payments and the annual growth rate for the past five years is quite high. Hence, RBI is keen to introduce digital currency after a careful consideration.
By Siva Kumar