RBI to initiate CBDC in wholesale, retail sectors

• RBI is in process of implementing Central Bank Digital Currency (CBDC) in a phased manner for wholesale and retail segments.

Central Bank Digital Currency (CBDC)

• Announced in Union Budget 2022-23
• Necessary amendments to relevant section of RBI Act, 1934 have been made with the passage of Finance Bill 2022.
• It has enabled RBI to conduct a pilot and subsequent issuance of CBDC.
• RBI is working on phased implementation of CBDC in both wholesale and retail segment.
• CBDC: Digital or virtual currency but it is not comparable with private virtual currencies or cryptocurrency.
• Private virtual currencies do not represent any person’s debt or liabilities as there is no issuer.

Prelims take away

• Central Bank Digital Currency (CBDC)
• Reserve Bank of India (RBI)