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Is India really ready for digital currency?


  • Priya Kumari 
  • (bachelor in Journalism and mass communication, Year- 2020-23, Noida International University)

Electronic payment is increasing rapidly in India, in such a situation, there was news for a long time that RBI may launch digital currency soon. Therefore, on 1 November 2022, RBI has launched the pilot project of Central Bank Digital Currency (CBDC). At present, this pilot project is issued only for the wholesale segment. Wholesale segment means that at present this facility is being offered on trial basis in banks regulated by RBI, RBI has now included nine India commercial banks in this such as State Bank of India, Union Bank of India, HDFC Bank, Bank of Baroda, ICICI Bank, Kotak Mahindra Bank, HBSC , IDFC First Bank and Yes Bank. With this, India has become the one of the major economies to launch a wholesale CBDC pilot.

RBI has also announced that it will soon launch a pilot project for the retail segment that means for the general public as well. With this a question also arises, is India ready for digital currency
because the number of cybercrime, cyber-fraud, hacking in India is not hidden from anyone, in the current situation, facilities like UPI, NEFT RTGS exist for online payments in India. Then what is the need of digital currency? And whether a country like India is ready for the regulation of digital currency, let’s find out.

  • First let us understand how digital currency (CBDC) is different from electronic payment?

There are many facilities for existing electronic payments in India, such as take the example of UPI, now to make payments to anyone with UPI, we need a bank account or an online wallet. This means that in our transaction a bank or a Fintech company play the role of a intermediate.

RBI is going to eliminate this intermediation through digital currency, in digital currency, RBI provides you a digital wallet in which your money will be kept under the supervision of RBI.

  • Now the question also comes, is digital currency same as a crypto currency?

The answer is no. Cryptocurrency has many similarities with digital currency such as

• Both work on the basis of technology.

• Both need a digital wallet for storage and payment. but Cryptocurrencies are not controlled by any central authority; Neither the central bank, nor the government, nor its developers.

  • The same CBDC will be controlled and distributed by the central bank.

What are the benefits of ‘Digital Currency’?

• The biggest advantage of digital currency is the reduction in the cost of currency management, so that RBI will be able to control the currency on a large scale in a short time.

• It will also curb the massive cost of printing, storing and distributing fiat currency.

• Now real time payment will also be ensured through digital currency and intermediation of banks will also end.

• The advantage of digital currency is also that it will reduce the losses due to volatility of the cryptocurrency.

• Both the US and China are working towards the development of digital currency. Due to which the proxy war started.

• India does not want to get caught in this, so it needs digital money so that India’s financial position is not affected in the war.

• Through the digital rupee, India wants to reduce its dependence on the dollar, India continuously encouraging smaller countries to trade in the rupee so that the rupee can become an international trade currency.

  • Major issue related to digital currency

According to recent data provided by DATAREPORTAL. The total population of was 1.40 billion in January 2022. And about to 53% of the population don’t have access of internet. It means half of the population is still untouched by online facility. It’s going to make hard for RBI to connect each and every citizen to digital currency. The Second major issue is cyber attacks. Minister of State for Electronics and Information Technology Rajeev Chandrasekhar itself informed the Parliament that Over 6.74 Lakh cybersecurity incidents were reported in the country in 2022 till June. The government also informed in parliament that India’s banks reported 248 successful data breaches by hackers and miscreants between June 2018 and March 2022.

These incidents included probing phishing attacks, viruses ,network scanning and website hacking. If we look at major cyber attack cases in India regarding Bank everybody must remember Cosmos Bank in Pune who was the targeted of a cyber-attack in India in 2018, when hackers stole worth rupees Rs. 94.42 crores from Cosmos Cooperative Bank Ltd situated in Pune.

There ’was also a ATM system hacking case of Canara Bank in 2008 . Over twenty lakh rupees were cleared from numerous bank accounts. At last but not the least RBI Phishing Scam, The Reserve Bank of India was not spared by the fraudsters in a daring phishing attempt of its kind. The phishing email, which purported to be from the RBI, promised the recipient Rs.10 lakhs in prize money within 48 hours if they clicked on a link that took them to a website that looked exactly like the RBI’s official website, complete with the same logo and web address. Following that, the user is prompted to reveal personal information such as his password, I-pin, and savings account number. The RBI, on the other hand, issued a warning about the fake phishing e-mail on its official website. The question is that In these circumstances, will RBI be able to assure the general public that their transaction digitally safe?

  • Conclusion

It can be said that digital currency is a big step towards the dream of Digital India by RBI and Government of India.

This will reduce India’s dependence on the dollar in the coming times.

But basically half of the population in India is missing from the internet facility and increasing cyber crime in India is a big problem in the circulation of digital currency, how could RBI resolve these two issues. This will be only answer in future that what is the future of currency in India.


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