Central Bank Digital Currency (CBDC) can be launched in the country in this financial year. The Reserve Bank of India (RBI) has said that CBDC will be linked to the existing monetary policy as well as payment systems. This CBDC will be controlled by RBI and will be created according to the financial structure of the country.
A CBDC is a blockchain-based payment solution controlled by a central bank. It works like cryptocurrencies but CBDCs do not have volatility and other risks like cryptocurrencies. Transactions on CBDC can be tracked by the government. RBI has a Report “The CBDC will be launched after a proof-of-concept process and trial. It needs to be designed in accordance with the objectives of the monetary policy and the payment systems,” it said. Recently, an RBI official had said that CBDC will be launched separately for wholesale and retail segments.
Finance Minister Nirmala Sitharaman says that CBDC will increase payment options for the people of the country. The central government hopes that this will also help in meeting its goal of increasing financial inclusion. There is no interference from the government in the development of CBDC and full responsibility has been given to RBI.
In recent days some countries have started work on plans to launch CBDCs. In the US, the Federal Reserve is exploring the possibility of launching a CBDC. Russia launches its own CBDC called the Digital Ruble testing has started. Earlier this year China tested its digital yuan during the Winter Olympics. Efforts are being made to increase the use of digital yuan in China. Jam-Dex, the digital currency of the Caribbean country Jamaica, is launching soon and its initial one lakh users will get the benefit of an additional $ 16. The government of Jamaica has made a strategy to give incentives to increase the popularity of this digital currency among the people. Its testing was completed last year. All Jamaicans will have access to Jam-Dex through a wallet provider or bank. All Jamaicans with a bank account will be able to receive the Jam-Dex digital wallet automatically.