RBI Plans Offline Access for Digital Money, says Governor Das

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As a researcher with experience in the field of central banking and digital currencies, I find Shaktikanta Das’ announcement about India’s intentions to create a central bank digital currency (CBDC) that can be accessed offline intriguing. This feature aims to address the challenges posed by internet connectivity in rural areas and other parts of the country where access to digital payment systems is limited.

Shaktikanta Das, the governor of the Reserve Bank of India (RBI), reveals India’s plan to issue digital currency that can be used even without an internet connection.

At a recent event held by the Bank for International Settlings on Monday, Das remarked that one significant advantage of cash is its offline functionality. He further shared that efforts are underway to enable offline transferability for Central Bank Digital Currencies (CBDCs) as well.

India leads the charge in exploring central bank-backed digital currencies, with global cautiousness in the background. The pilot project already boasts 1.3 million customers and 300,000 merchants. Daily usage of CBDCs reaches a significant milestone of 1 million transactions. However, instant mobile payments continue to be a preferred choice for Dad.

According to Das, the primary goal of the pilots is to bring about a shift in deposit habits among consumers. To fully grasp the broader implications for monetary policy and the banking system, it’s essential that we observe a significant increase in transactions related to bank deposits.

As a crypto investor following the latest developments in central bank digital currencies (CBDCs), I’ve been keeping an eye on the recent discussion between Joachim Nagel from Germany and Fabio Panetta of Italy, moderated by Hyun Song Shin of the Bank for International Settlements. During this virtual panel, RBI Governor Shaktikanta Das highlighted that rendering CBDCs “non-remunerative” and “non-interest bearing” has successfully addressed any concerns regarding bank disintermediation. In simpler terms, by not offering returns or interest on these digital currencies, central banks have minimized the potential threat to traditional banking services.

CBDCs, or Central Bank Digital Currencies, offer the advantage of enhanced transaction efficiency. However, issues like data privacy and cybersecurity remain significant hurdles, preventing widespread rollout. The Reserve Bank of India (RBI) shares this cautious stance, joining a growing number of countries such as Jamaica, The Bahamas, and Nigeria, who have publicly introduced CBDCs.

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2024-05-06 23:33