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RBI, the Indian central bank, is looking into the offline functionality of digital currency. The RBI executive director Ajay Kumar Choudhary, however, had previously stated that India's CBDC will not replace physical currency or the current financial system and will be the least disruptive design. The public will have access to a digital form of money through the digital rupee which will serve as an alternative to cryptocurrencies. This statement echoed the recent claim made by RBI Deputy Governor T. Rabi Sankar that the digital rupee should be able to do everything that cryptocurrencies can do but without the risks that come with them.
India's CBDC to Be Used In Retail And Wholesale Sectors
India's central bank began testing its digital rupee in the wholesale and retail sectors. The first retailer to accept digital rupees was Reliance Retail. Over 50,000 people use the digital rupee, and 5,000 merchants accept it. The Unified Payments Interface (UPI), India's current instant real-time payment system, uses banks as intermediaries whereas CBDC functions more like physical currency notes with an automated sweep-in and out feature.
India's Central Bank Warns Against Cryptocurrencies Like Bitcoin And Ether
The Reserve Bank of India (RBI) continues to recommend a total ban on cryptocurrencies like bitcoin and ether. Cryptocurrency poses significant threats to cyber security, India's monetary system, and financial stability. Additionally, it might undermine the authority of the central bank.