Digital Currency in India #erupee #cybersecurity #digitalcurrency
Bivas Chatterjee 2 Nov 2022

Digital Currency in India #erupee #cybersecurity #digitalcurrency

Recently we have got the Concept Note on Central Bank Digital Currency, Fintech Department, RBI, October, 2022: and as per that note, all types of cryptocurrencies and its negative effects has been explained, stating that the effect of the cryptocurrencies is a negative one in the economic sphere and supported for Central based cryptocurrencies or e-rupees and also proposed for two types of e-rupees - one is for wholesale and another for retail and also invented a concept i.e., token based and the account based.

As per the Concept Note on Central Bank Digital Currency, Fintech Department, RBI, October, 2022:

“Private virtual currencies sit at substantial odds to the historical concept of money. They are not commodities or claims on commodities as they have no intrinsic value. The rapid mushrooming of private cryptocurrencies in the last few years has attempted to challenge the fundamental notion of money as we know it. Claiming the benefits of de-centralisation, cryptocurrencies are being hailed as innovation that would usher in de-centralised finance and disrupt the traditional financial system. However, the inherent design of cryptocurrencies is more geared to bypass the established and regulated intermediation and control arrangements that play a crucial role of ensuring integrity and stability of monetary and financial eco-system.

As the custodian of monetary policy framework and with the mandate to ensure financial stability in the country, the Reserve Bank of India has been consistent in highlighting various risks related to the cryptocurrencies. These digital assets undermine India’s financial and macroeconomic stability because of their negative consequences for the financial sector. Further, a wider proliferation of cryptocurrencies has the potential to diminish monetary authorities’ potential to determine and regulate monetary policy and the monetary system of the country which could pose serious challenge to the stability of the financial system of the country. In this context, it is the responsibility of central bank to provide its citizens with a risk free central bank digital money which will provide the users the same experience of dealing in currency in digital form, without any risks associated with private cryptocurrencies. Therefore, CBDCs will provide the public with benefits of virtual currencies while ensuring consumer protection by avoiding the damaging social and economic consequences of private virtual currencies.”

Presently lot of counties are working on their CBDC or their own digital currencies and India is one of them and we are also looking forward to the effect which is going to take place in the days come and the future will have the answer.

Source Concept Note on Central Bank Digital Currency, Fintech Department, RBI, October, 2022:

Digital Currency in India

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