Thursday, December 8, 2022

RBI governor raises concerns about the wider use of the eRupee

Challenges in eRupee’s wider use: RBI governor

 

MUMBAI: Shaktikanta Das, governor of the RBI, has stated that eRupee, the central bank digital currency (CBDC), will face numerous obstacles that must be resolved before it can be widely used. However, the same anonymity feature that is available for cash payments will apply to the eRupee.


The law that makes it illegal for merchants to refuse fiat currency was what the governor was referring to. According to the amendment to the RBI Act, CBDC is included in fiat currency.


Das described the government securities wholesale pilot as "very satisfactory." The processes and technology have largely worked. Market participants are pleased that G-secs transactions have instant settlement and do not require collateral. We are addressing some of the lessons learned, Das stated. There will be a number of lessons learned from the retail pilot, which only began the first week of December. However, "let there be no fear psychosis that will be pursued," Das stated.


According to T Rabi Sankar, the RBI deputy governor, "There can be innovative solutions for anonymity." In order to maintain our anonymity, we are contemplating using one of the technology options. A legal provision to guarantee anonymity is another option. Therefore, how things develop will determine exactly what takes place.


Das stated, speaking anonymously, that CBDC will not differ from paper currency in any way in the eyes of the law. The same rules will apply to CBDC as they do to cash payments and withdrawals from the income tax department. Das said that very much like in paper money, the exchange of CBDC won't be referred to the bank as the tokens will get moved from one portable to another without being kept in bank books.

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