On Friday, the Reserve Bank of India released a concept note on its digital currency, expressing that it will soon start the pilot launch e-rupee for explicit use cases.
In a report, the central bank said the reason behind the issue of the concept note is to make mindful of the central bank’s digital currency and the arranged features of the digital rupee.
“The concept note likewise discusses key considerations like technology and design decisions, potential purposes of the digital rupee, and issuance components, among others”, the RBI said in an explanation.
Here is the official RBI Press Release of 07.10.2022
The concept note expresses that the central bank digital currency is a sovereign currency issued by the central banks in arrangement with the financial strategy. It will show up as a liability on the central bank’s balance sheet.
Digital currency should be acknowledged as a mode of payment, legal tender, and a protected store of significant worth by all citizens, enterprises, and government organizations.
The digital currency will be freely convertible against business bank cash and money. It will be a fungible legitimate tender for which holders need not have a bank account.
Bringing down the cost of issuance of money and transactions is expected. Looking at a diminishing utilization of paper currency, the central banks are presently trying to promote a more acceptable electronic type of currency.
The central bank’s digital currency will be upheld by the state-of-art payment systems of India that are reasonable, accessible, advantageous, safe, and secure. The RBI concept note says the e-rupee will reinforce India’s digital economy, improve monetary consideration and make the financial and payment frameworks more productive.
The digital currency should be created as a platform that is exceptionally scaleable to help extremely high volume and rate of transactions without execution debasement. It ought to be robust to guarantee the stability of the monetary ecosystem and have tamper-proof access control conventions and cryptography for the security of information among different features.
Referring to worries about safety, the RBI concept note expresses that central bank digital currency ecosystems might be at a comparative risk of cyber-attacks that the ongoing payment systems are exposed to. cybersecurity considerations need to be taken care of both for the item and the environment.
The central bank digital currency is supposed to generate huge sets of data continuously. “After factoring in the concerns related to anonymity, appropriate analytics of Big Data generated from CBDC can assist in evidence-based policymaking. It may also become a rich data source for service providers for financial product insights”, the concept note stated.
Focusing on consumer protection, RBI calls it a significant pillar of financial strength. The central bank has required a consumer security system that should consider the variety in the digital proficiency of the customers and ways of expanding consumer understanding and transparency.
The RBI required consistent access to digital currency by consumers. It likewise emphasized a compelling and proficient goal of customer complaints through a robust mechanism.