Why govt decision to launch ‘digital rupee’ is a big deal?

This editorial is based on “RBI Shouldn’t Rush the Launch of India’s Official Digital Rupee” which was published in Livemint on 09/02/2022. It talks about the significance of digital rupee and the associated challenges of its hasty launch.

In her Budget speech,finance minister Nirmala Sitharaman announced the launch of a central bank digital currency in FY 2022-23. A look at how it will be different from the rupee that we are used to,and the ways in which it could affect the eco

What is central bank digital currency?

Digital currency may seen like a new concept,but if you use cards,net banking or payment app like paytm and

Google pay , you are already part of the movement toward cashless transactions that it is designed to strengthen.

CBDCs,though,are about more than just cashless transactions and could end up transforming the banking system.

CASHLESS COMFORT

The use of physical cash is on the wane,a phenomenon to which the pandemic contribute significationtiy.An RBI survey in April 2021 showed of over Rs 500,digital payment was the preferred mode.

The Biggest nudge to governments’ digital currency push has come from the rise of cryptocurrencies like Bitcoin and Ether that have promoted speculation as currency backed by the government as they claim to do most of the work of the modern banking system more swiftly and at a fraction of the cost.