CENTRAL BANK DIGITAL CURRENCY

TOPIC: Economy

Context- The Budget has proposed the introduction of digital currency, using blockchain and other technologies, by the RBI in FY23.

Concept-

About CBDC:

According to the RBI, the CBDC will be a legal tender in digital form.
It will be the same as ﬁat currency and will be exchangeable one-to-one with ﬁat currency.
The Finance Bill has provisions for amending the RBI Act, 1934, to introduce the CBDC.
An amendment needs to be made to Sections 2 and 22 of the Act, which will ensure that CBDC is regarded as bank notes.
It is further proposed to insert a new Section 22A relating to the non- applicability of some sections of the Act for the digital bank note.
- Sections 24 (denomination of notes),
- Section 25 (form of bank notes),
- Section 27 (re-issue of notes),
- Section 28 (recovery of notes lost, stolen, mutilated or imperfect) and
- Section 39 (obligation to supply diﬀerent forms of currency)