Central Bank Digital Currency can be a great challenge when it comes to serving the purpose of financial inclusion. Discuss (200 Words)
Refer - Business Line
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IAS Parliament 3 years
KEY POINTS
· The RBI’s concept paper on CBDC (Central Bank Digital Currency) sets in motion the process for its introduction.
· The essential features of ‘money’ are that it should serve the requirements of being a medium of exchange, store of value and unit of measurement.
· The major challenge here is to make it accessible to those who have limited access to electricity or internet, or are not comfortable with technology, especially smartphones.
· The second issue relates to whether this should relate to only wholesale or retail transactions.
· The third issue relates to the issuance mode. The paper debates the issuance and maintenance by the central bank or the commercial banks, as both options exist.
· The fourth aspect of the CBDC relates to the form of issuance. Here the paper talks of it being token based like a currency note or account-based which is akin to bank deposits.
· The design of the instrument is addressed. The option is to pay an interest rate on the CBDC which will be an incentive to the holder.
· As mentioned earlier, e-wallets may become less relevant as CBDC catches on and currency is replaced, ATMs and rental spaces and accompanying infrastructure would become less important.
yogendra pratap singh 3 years
Kindly evaluate
IAS Parliament 3 years
Try to bring coherence in the answer. Keep Writing.
PANDI SANTHOSH RAJA S 3 years
Kindly review
IAS Parliament 3 years
Good attempt. Keep Writing.
Sivasurya 3 years
Please review
IAS Parliament 3 years
Good attempt. Keep Writing.
K. V. A 3 years
Pls review
IAS Parliament 3 years
Good attempt. Keep Writing.
