Why is the Government introducing Digital rupee? What will be the risks in the transition to a new monetary system?
The Central Bank Digital Currency or Digital Rupee will be in form of legal tender that will be issued by RBI in digital form. The digital currency will be similar to the fiat currency issued by the RBI in paper form. It will be interchangeable with any other currency.
Potential of Digital Rupee
- Cut expenditure on printing
It will be a critical step towards making our economy paperless. The money used for printing currency can be reduced tremendously.
- Digital economy
The move would give a big boost to digital economy and India would be the first major country to officially launch its currency in such a manner.
Benefits of Digital Rupee
- Faster settlement
The Digital Rupee transaction will be instantaneous as compared to the current digital payment experience. It will work like paper currency.
- Prevent misuse
The announcement of its own digital currency will ensure that money flows through conventional path and can be easily monitored. It will prevent usage for terror financing or hawala transaction.
- Cut out expenditure
The cost involved in cross-border transaction could be cut significantly as there would not be inter-bank settlement. This will save remittance charges.
Read more - https://economictimes.indiatimes.com/wealth/save/all-you-need-to-know-the-rbi-central-bank-digital-currency-or-digital-rupee/bridging-global-differences/slideshow/89408998.cms
https://www.thehindu.com/business/Economy/rbis-digital-currency-plans/article38395561.ece
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