Reserve Bank of India explores offline function of digital currency

03/05/2023 09:54 • Blockchain Buzz • 119 views

It is reported that Ajay Kumar Choudhary, Executive Director of the Reserve Bank of India (RBI), provided some latest information about the Central Bank of India’s digital currency (CBDC) in an interview with CNBC. Choudhary said that the Central Bank of India was exploring the offline function of the digital rupee. Noting that CBDC will soon become a medium of exchange in India, he stressed that it needs to have all the characteristics of physical currency, including anonymity. RBI Executive Director previously said that the design of India’s CBDC would be the least disruptive and would not replace the physical currency or the current financial system.

RBI official: The digital currency of the Central Bank of India will replace the cryptocurrency

Interpret the above information:

In an interview with CNBC, Ajay Kumar Choudhary, the Executive Director of the Reserve Bank of India (RBI), provided some latest information about the Central Bank of India’s digital currency (CBDC). According to Choudhary, the Central Bank of India is exploring the offline function of the digital rupee. This means that even without an internet connection, individuals can use CBDC as a form of payment.

Choudhary also stressed that the CBDC needs to have all the characteristics of physical currency, including anonymity. As CBDC is expected to become a medium of exchange in India soon, it is important that it maintains certain elements of traditional currency, such as cash transactions, that citizens are familiar with. Anonymity, in particular, is a key feature of physical currency that must be maintained in CBDC.

Previously, Choudhary had mentioned that the design of India’s CBDC would be the least disruptive and would not replace the physical currency or the current financial system. This approach challenges the notion that digital currencies threaten existing financial systems, and presents the CBDC as a complement to traditional currency rather than a threat. In other words, the CBDC is expected to coexist with existing financial systems and provide users with an additional payment option.

The offline function of the digital rupee aligns with India’s efforts to promote digital payments and financial inclusion while still catering to those who are not yet comfortable with digital technology. By providing users with an offline option, this allows for greater adoption and access to CBDC even in rural areas or areas with poor internet connectivity.

Overall, the Reserve Bank of India’s exploration of the offline function of the CBDC highlights a significant development in the country’s efforts to create a digital currency that complements the traditional financial system. With the push for financial inclusion and digitalization, CBDC could potentially provide an accessible and convenient payment option for many citizens.

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