Central Bank Digital Currency is a new technological innovation designed to overshadow impact caused by the crypto currency. Do you agree with this view? Comment (200 Words)
Refer - The Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· Unlike crypto currencies which can be lost and stolen, CBDCs will be an alternative to physical currency, safe, robust and convenient payment instrument.
· They are neither backed by assets such as gold and foreign reserves, nor issued by the central bank with full guarantee of the government.
· They do not represent the liability of any central bank or government.
· Central banks owned by governments or enjoying independent statutory status are its creators.
· CBDCs can leave behind trails; but it can be remedied through tokenization.
· Whether it can be transferred anonymously and accumulated secretly will depend upon the operational architecture designed by the central bank.
· Digital rupee, when introduced, will not completely replace or drive away physical currency from circulation.
· It will not replicate electronic money either. Even developed nations have not thought of doing away with cash altogether.
· CBDCs, if successfully implemented, can lead to loss of business for credit and debit card issuing banks and supporting companies.
· CBDCs are not designed to compete with crypto currency. Crypto assets are based on technology designed to circumvent authority and banish central bank money to create economic anarchy.
· The biggest challenge for monetary authorities would be to restrict the use of CBDC within national boundaries.
Abdul hakkim 3 years
Please review mam/sir
Thanks
IAS Parliament 3 years
Avoid listing out points in the answer and explain them in brief. Keep Writing.
ANIL KUMAR RAM 3 years
Please review
IAS Parliament 3 years
Try to emphasize more on advantage of CBDC over cryptocurrency. Keep Writing.
SREE 3 years
Kindly evaluate
IAS Parliament 3 years
Try to stick to word limit. Keep Writing.
