Sign In
Learn bits
Economy
Mahesh

22/07/22 16:32 PM IST

Phased implementation of digital currency for wholesale, retail segments in the works

In News
  • The Reserve Bank of India (RBI) is in the process of implementing the Central Bank Digital Currency (CBDC) in a phased manner for wholesale and retail segments.
Advantages 
  • For social benefits and other targeted payments in a country
  • CBDCs could be used for faster cross-border remittance payments.
  • Inclusive development: universal access attributes of a CBDC could also include an offline payment functionality, thus helping bridge the digital divide.
  • Instant lending to micro, small, and medium enterprises (MSMEs)in India can be possible with the help of CBDC.
About CBDC 
  • A Central Bank Digital Currency (CBDC), or national digital currency, is simply the digital form of a country’s fiat currency.
  • Instead of printing paper currency or minting coins, the central bank issues electronic tokens. This token value is backed by the full faith and credit of the government.
  • CBDC is not comparable with private virtual currencies or cryptocurrencies. It will be a sovereign-backed digital currency.
Challenges 
  • Potential cybersecurity threat.
  • Lack of digital literacy of the population.
  • Issue with regulation, tracking investment and purchase, taxing individuals, etc.
  • Threat to Privacy: The digital currency must collect certain basic information about an individual so that the person can prove that he’s the holder of that digital currency.
Source- The Hindu 

More Related Current Affairs View All

20 Feb

The Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999

'Investors who were defrauded in the Torres Ponzi scam may receive about Rs 40 crore over the next six months.' The Mumbai Police’s Economic Offences Wing (EOW) has begun

Read More

18 Feb

Aravali safari park project

'The Haryana government’s ambitious 3,858 hectare Aravali safari park project spread across Gurugram and Nuh — which was one of the poll promises of the ruling Bharatiy

Read More

17 Feb

President’s rule function

'Recently,  four days after Manipur Chief Minister N. Biren Singh’s resignation, the Union government announced that President’s rule has been implemented in the v

Read More

India’s First Ai-Driven Magazine Generator

Generate Your Custom Current Affairs Magazine using our AI in just 3 steps