The Reserve Bank of India (RBI) has said that India's central bank digital currency (CBDC) will be called ‘'e₹’ which could be used for specific use cases, without providing a definite timeline.
The RBI said this in a concept note on central bank digital currency (CBDC) aimed to create awareness about such currencies in general and the planned features of the Digital Rupee, in particular, according to a release.
In the concept note, the RBI said that CBDC will be an additional payment avenue for users, and is not aimed at replacing existing payment systems.
The digital rupee will further bolster India’s digital economy, make the monetary and payment systems more efficient and contribute to furthering financial inclusion, the RBI said.
CBDC is a currency that is backed by the regulator and stored in a digital format. It can be converted into paper currency and will reflect on the RBI’s balance sheet, thereby granting it legal tender status. India is aiming to launch its own central bank digital currency in this financial year that ends March 31, 2023.
The RBI's concept note aims to provide a high-level view of motivations for the introduction of CBDC in India, its potential design features, implications on various policy issues, and the possible requirements of a technology platform said the regulator.
The concept note is an explainer of the CBDC’s technology, design choices, possible uses, and issuance mechanisms, among others. The note examined the implications of the introduction of CBDC on the banking system, monetary policy, and financial stability, and analysed privacy issues.
According to the RBI, CBDC, being a sovereign currency, holds unique advantages of central bank money, especially trust, safety, liquidity, settlement finality, and integrity.
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