DIGITAL RUPEE

  • February 2, 2022
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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DIGITAL RUPEE

TOPIC: Economy

Context: Finance Minister Nirmala Sitharaman Tuesday announced the launch of the Digital Rupee — a central bank digital currency (CBDC) — 2022-23 onwards.

Concept: 

What is a CBDC?

  • CBDC is a legal tender issued by a central bank in a digital form.
  • It is similar to a fiat currency issued in paper and is interchangeable with any other fiat currency.

What is the need for CBDC?

  • The goal is to provide users with convenience and security of digital as well as the regulated, reserve-backed circulation of the traditional banking system.

Who will launch the CBDC?

  • The Reserve Bank of India will launch the CBDC from the upcoming financial year.
  • This follows the government’s plans to launch the CBDC that will be backed by blockchain technology.

What does this change for citizens?

  • One chief difference will be that a Digital Rupee transaction will be instantaneous as opposed to the current digital payment experience.
DIGITAL RUPEE economy