What is Digital Rupee? Details Inside

New Delhi: Finance Minister Nirmala Sitharaman on Thursday announced that the Reserve Bank of India (RBI) will introduce Digital Rupee – a central bank digital currency (CBDC) using blockchain and other technologies in the Financial Year 2022-2023, to boost the Indian economy.

“Digital rupee to be issued using blockchain and other technologies; to be issued by RBI starting 2022-23. This will give a big boost to the economy,” she said. 

Here are the quick details you need to know about the Digital currency:

Who will launch the CBDC?

The Reserve Bank of India (RBI) will be launching the Digital Rupee in the upcoming financial year. According to information shared by the Finance Minister, the CBDC will be backed by blockchain technology.

What is CBDC & What is the need for it?

CBDC is a legal tender issued by the central bank in digital form. This is similar to fiat currency issued on paper. Once operatitional, it will enable users a convenient & secure means of digital transaction.

What does the Budget announcement mean?

The RBI also already raised concerns over money laundering, terror financing, tax evasion, and others along with private cryptocurrencies such as Bitcoin, Ether. In a bid to control illicit money-changing hands, the central bank had given enough hints of releasing its own CBDC. With this announcement, government has laid out clear intentions about keeping a hawk’s eye on all virtual currencies including cyrptocurrency. 

How will your life change after digital rupee launch?

Not much is clear about the nature & scope of digital rupee. Picture will become clear after RBI provides more details on it. However, one main difference will be that a Digital Rupee transaction will be instantaneous as compared to the current digital payment options.