The Indian central bank hopes that CBDC can combat the crypto threat
The Indian central bank hopes that CBDC can combat the crypto threat
- India has presented its most important motives for planning a CBDC pilot project
- It is the first time since February that the country's central bank announces its intentions
In India, the central bank drives its digital central bank currency (CBDC), in the conviction that it can counteract the perceived threats that work out of cryptocurrencies for the country's financial stability.
The Reserve Bank of India (RBI) outlined her intentions for her digital rupie - still in a research phase - in a on Friday.
The note extends to the first considerations of the bank in February, when it announced the intention of introducing a CBDC at some point between 2022 and 2023.
In accordance with the recommendations of an internal working group, which was set up by the bank in October 2020, the RBI is now saying that it is investigating a account-based wholesale CBDC and a token-based retail CBDC via a "graded approach".
Retail CBDCs refer to electronic forms of cash, while wholesale CBDCs are used for inter-bank transfers between financial institutions.
Both the wholesale and retail models are designed to improve efficiency and to rationalize the processing, while the operating costs are reduced and financial inclusion is promoted, said the RBI.
The RBI outlined various phases in front of a final CBDC pilot project: Construction of a prototype, stress tests of the project with both negative and positive applications and final evaluation of the results.
The central bank added that CBDCs are sovereign currencies that offer greater control over their financial fate, since they try to counter the "rapid mushroom growth of private currencies", which questioned basic ideas of money "as we know it".
In this context, it is the responsibility of [the] central bank to provide their citizens a risk -free digital central bank money that offers users the same experience in trading in digital forms without risks in connection with private cryptocurrencies, "said the RBI in its message. In this case,private cryptocurrencies are considered all digital currencies that are not issued by the state. After determining the end results, India could continue with the implementation, said the bank without specifying a final period.
India joins the long list of CBDC research projects around the world
In view of other digital currencies issued by banks, Brand India's high -flying implementation plans could take years before they get to execute, if at all.
China's digital Yuan is still in the pilot phase, but is the first of its kind to be tested and output by a large economy. The development took a lot of time that goes back to 2016 when the country was founded Project Hamilton .
Data from cbdc-tracker shows that most of the developed economies all over the world have started researching CBDCs, whereby more than 120 projects have been performed. Of these, only two central banks - the Bahamas and Jamaica - have fully introduced CBDCs.
Six countries, including Singapore, the Philippines, Denmark and Ecuador, have set their efforts as a whole, and only nine CBDCs are currently in the proof-of-concept phase.
worldwide there are seven active CBDC pilot projects, including projects in Canada, Saudi Arabia and France.
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The contribution India Central Bank Hopes CBDC CAN COMBAT CRYPTO Threat is not a financial advice.