RBI to initiate CBDC in wholesale, retail sectors

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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)