Counterfeiting is a major challenge with digital currency, says RBI Governor Shaktikanta Das

The RBI top management said that there will be attempts to commit fraud through digital currencies as is the case with most digital transactions
RBI governor Shaktikanta Das (File photo | PTI)
RBI governor Shaktikanta Das (File photo | PTI)

RBI governor Shaktikanta Das has said that the Central Bank is mindful of the risk of counterfeiting while developing a digital currency. The governor said this in the post-monetary policy press conference on Wednesday.

He said that the major challenge with developing a digital currency is addressing the cyber security risk associated with such currencies.

“As with paper notes, there is risk of fake currency in digital currency as well,” said the governor.

The RBI top management said that there will be attempts to commit fraud through digital currencies as is the case with most digital transactions.

The central bank is working on two digital currencies – wholesale and retail.

“While a lot of work has been done on the wholesale digital currency, the retail currency is slightly complicated and would need more work,” the governor informed the media.

The Reserve Bank of India is planning to introduce digital currency soon and it has sent a proposal to the finance ministry to amend the RBI Act, 1934 to include digital currency in the definition of ‘bank note’.

“Government has received a proposal from Reserve Bank of India (RBI) in October, 2021 for amendment to the Reserve Bank of India Act, 1934 to enhance the scope of the definition of ‘bank note’ to include currency in digital has been examining use cases and working out a phased implementation strategy for introduction of CBDC with little or no disruption,” Pankaj Chaudhary, Minister of State in the Ministry of Finance, in a written reply to Lok Sabha said.

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