Last week, the Reserve Bank of India (RBI) move to issue a concept note on the Central Bank Digital Currency (CBDC) ‘digital-rupee’, which seems to have resulted in the return of buoyancy in the blockchain and the cryptocurrency market. “A centralised system intentionally avoids innovation and the establishment of a transparent and responsible system. Blockchain and decentralisation are required for CBDC success,” Alok Joshi co-founder, and CEO, Lepasa Metaverse Ecosystem, told FE Blockchain.
The RBI stated that developing CBDC might provide the public with a risk-free virtual currency which will provide them with legitimate benefits without hazards associated with trading in private virtual currencies. According to Dileep Seinberg, founder and CEO of MuffinPay, this is one of the most important developments for the Indian Fintech sector and will help the creation of enterprise-level use cases. “The RBI should strive to create a trustworthy and reliable digital infrastructure,” he added.
Furthermore, the rise in the popularity of cryptocurrencies in recent years has alarmed the RBI as well. The proliferation of cryptocurrency assets, according to the RBI, poses serious dangers for money laundering and terrorism financing. “The unabated use of crypto assets can be a threat to the monetary policy objectives as it may lead to the creation of a parallel economy and will likely undermine the monetary policy transmission and stability of the domestic currency,” RBI noted.
According to industry observers, digital currency is an excellent addition to the payment options available to consumers and businesses, “The digital-rupee will make the transactions cheaper as well as secure,” Shubham Gupta, chief product officer, STAN, stated.
RBI earlier informed that for all individuals, companies, governments, and other entities that can convert it into bank money or cash, CBDC will serve as a means of exchange, a kind of legal tender, and a reliable store of value. CBDC wants to make transactions faster and cheaper.