The Reserve Bank of India formally introduced its own CBDC proposal late last week. The regulator has released a study on the possibilities for the virtual rupee and any issues that might develop following the launch of the currency.
According to the report, CBDC will serve as one of the cornerstones for the digitization of India's payment system. The Central Bank will be able to lower transaction costs and expand the accessibility of financial services for citizens in rural areas of the nation with the use of digital currency.
Additionally, the Reserve Bank intends to create a CBDC use mechanism that would enable sending and receiving tokens offline, or without Internet connectivity.
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In the paper, the regulator also mentioned the dangers of investing in bitcoin and other virtual currencies that are not under the supervision of the Indian government. The digital rupee needs to replace these instruments.
The Central Bank is prepared to launch two varieties of digital money for banks and individuals. The authorities do not completely rule out the possibility of both CBDC formats being on the domestic market and interfering with one another.