Digital Currency is any currency, money or money-like asset that is primarily managed, stored or exchanged on digital computer systems, especially over the internet. In recent years, the investment and technology worlds have become saturated with Crypto Currencies, Block Chain Apps and related ventures and projects. Indian Finance Minister, Nirmala Sitharaman announced in the Union Budget 2022 that Reserve Bank of India (RBI) will launch India’s own digital currency by the next year. It will be based on Blockchain Technology.
DIGITAL CURRENCY BY RBI
India’s very own official digital currency is likely to debut by early 2023. Finance Minister of India, in her Union Budget 2022 speech last week, talked about launching a Central-bank-backed “Digital Rupee” soon. A top Government source said that Digital Currency launched by RBI will mirror any of the currently available private company-operated electronic wallet and it would be numbered in units. It would be more like an electronic form of Fiat Currency and thus in a sense, it would be a government-mandated electronic wallet. The Digital rupee block chain, being developed by the Reserve Bank, would be able to trace all transactions, unlike the current system of mobile wallet offered by private companies
POSITIVE IMPACTS OF THE DIGITAL CURRENCY BY RBI
The digital currency by RBI, also known as Central Bank Digital Currency (CBDC), is a virtual currency but it is not comparable to the private virtual currencies or Crypto currency that have mushroomed over the last decade. Private virtual currencies do not represent any person’s debt or liabilities as there are no issues. The Government has already said that private Crypto currencies will never be a legal tender. In fact, the RBI has been vehemently opposing private Crypto currencies as they could have implications on our national security and financial stability. It is noteworthy, that one trigger for Central Banks across the world hurrying up with their planning and exploration of digital currencies, is the Pandemic Covid-19. It has led to the increased usage of digital payments during the lockdown.
According to experts, a CBDC would replace cash and transform the banking system globally within a generation. The benefits could include increased growth and reduced poverty in the emerging world. Digital currency will also lead to a more efficient and cheaper currency management system. The RBI Deputy Governor emphasises that the advantage that a CBDC offers is of greater efficiency and flexibility, allowing for better oversight and more seamless transactions. This would also reduce dependency on cash. The introduction of a Central bank digital money will give the digital economy a significant boost.
HOW TO BUY CENTRAL BANK DIGITAL CURRENCY?
It is a sovereign currency in an electronic form and it would appear as liability ( currency in circulation on a central bank’s balance sheet). If you want to buy CBDC or Central Bank Digital Currencys, you need to have some information. There are two types of CBDCs; Retail and Wholesale. There are hybrids too, that combine the elements of two. Retail CBDCs are issued to general public. Under this model, consumers are able to own a CBDC in a wallet or account and use it for payments. This type of currencys would serve as a public digitals banking option that anyone can use. Wholesale CBDCs would be issued by banks and other financial institutions. The RBI will issue digital currencies for a pilot, based on which is ready first.
RELEASE DATE OF INDIAN DIGITAL CURRENCY
The RBI plans to introduce a digital rupee based on Blockchain Technology, in the fiscal year 2022-2023.
Digital rupee issued by RBI will be a legal tender. Digital currencys India RBI will be recognized as full fledged currencys and the Government will lay a 30% tax on gains made from any other digitals assets from April 1.