With CBDC, cross-border transactions will get faster and cheaper

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India, being at the forefront of digital transformation, is already in the process of ushering in a government backed digital currency and the first ever trials of digital rupee in India may be launched by December 2021, according to RBI Governor Shaktikanta Das.

With CBDC, cross-border transactions will get faster and cheaper.

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    India, being at the forefront of digital transformation, is already in the process of ushering in a government backed digital currency and the first ever trials of digital rupee in India may be launched by December 2021, according to RBI Governor Shaktikanta Das.

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    #CBDC is a digital form of central bank money that can be accessible to the general public; essentially, it consists of individuals and firms having access to transaction and savings accounts with their home country’s central bank. The Government of India has proposed to issue CBDC, ‘Digital Rupee’ during the FY2022-23 which would be a digital avatar of India’s Fiat Currency, controlled and monitored by the Reserve Bank of India (RBI). CBDC will be a legal tender, being a revamped version of the physical currency, which will eventually reduce cost of currency management. CBDC could help policy-makers achieve goals around payment efficiency, financial inclusion, banking and payment competitiveness, access to safe central bank money in the era of digital payments, and more. People can convert digital currency to physical currency and vice-versa with ease. As per RBI, the digital rupee blockchain being developed by the RBI would be able to trace all transactions, unlike the current system of mobile wallets offered by private companies. The units issued in the digital rupee would be included in the currency in circulation, it added. The RBI's digital currency is likely to debut by early 2023. Currently, the bitcoin blockchain supports up to seven transactions per second and then there are some others that let a few thousand transactions per second. However, security aspects involved in constructing and deploying a central bank digital currency (CBDC).

    It is a matter of great concern on the Security part, which is an essential element in the CBDC system. In addition to securing the underlying storage and transfer of value, security involves

    aspects of privacy and resilience. Threats must be mitigated to protect the integrity of funds and the confidentiality of users. A secure CBDC system will retain public trust in the central bank. Under an ac

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    #CBDC can be considered similar to cryptocurrencies but are centralized and regulated. The first pilot of the retail digital rupee will be issued in the same denominations as the currently issued paper currency and coins. Person-to-Person and Payment to Merchant transactions can be made, and Payments to Merchants can be made through QR codes displayed at merchant locations.

    Experts say, retail CBDC is helpful for the general public as they can use it in their day-to-day transactions. Also, CBDC is based on Distributed Ledger Technology, the same as the private blockchain network funded by the government, enabling tracking of anonymous transactions. Therefore, it facilitates making secure and safe transactions and prevents any illegal activity. Government can monitor and trace any suspicious transactions and implement anti-money laundering and combating financial terrorism measures.

    Experts say, CBDCs, by their very nature, are digital versions of paper currency, and like paper currency, they will have unique serial numbers and denominations. The point is that the paper version of the rupee and the digital are the same.

    CDBCs will convert a percentage of the paper currency into a digital version, which will then be used for merchant transactions for goods and services and for peer-to-peer transfers. This is advantageous to the country from both an efficiency and cost perspective. Because of instant settlement and high trust, this can be very useful, particularly in the hinterland areas.

    Going forward, there has been substantial growth in the digital payments markets over the last few years, which only promises to continue. CBDCs will undoubtedly bring many efficiencies to the Indian payment system. India will join Sweden, China, the European Union, The Bahamas, etc., as a CBDC nation. Besides, the government should adopt safeguards to avoid threats of #cyberattacks.

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    Disclaimer:
    The purpose of this channel is not to support or encourage underage drinking but to provide knowledge of the products we consume. This channel does not promote or sell any alcoholic product. The purpose of this channel is to strictly entertain and inform people about products available on the market. We are strictly against underage drinking and do not support it.

    About The Channel:-
    If you love homestyle cocktails, reviews of Alcohol, Drink kn

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