NEW DELHI: It will take nearly four to five years to make central bank digital currency or eRupee popular among common people, according to banking sources.
The Reserve Bank of India (RBI) had initiated a pilot of the retail CBDC in December 2022, reaching the goal of 10 lakh transactions daily by December 2023. Recently, the RBI announced that Digital rupee users will soon be able to conduct transactions in regions with restricted internet access. “RBI is going slow for the full scale implementation of CBDC as it entails a lot of safety, integrity and efficiency,” a top banking official said. He also added that there is no urgency for CBDC as payments are happening smoothly via UPI, net banking and other mode of payments.
Meanwhile, as per sources, banking officials are divided over relevance of CBDC, as in the current scenario most payments are taking place via UPI and net banking.
“The main purpose behind introducing eRupee was to curtail cryptocurrency. The government has succeeded in achieving that target. Online transactions are already happening via net banking, UPI and other online modes, so there is no relevance of CBDC,” a top official further.
Recently, finance minister Nirmala Sitharaman underscored the perils linked to unregulated cryptocurrencies. She said the threats of illicit activities like terror funding and drug financing arising from lack of consistent regulations globally.
Another banking official, however, said CBDCs can be used in capital account and large scale commercial transactions as there are limitations in net banking and UPI while executing them. “Net banking and UPI have their own limitations. In addition, severel other issues like financing of terror actitivities and counterfeiting of currencies can be sorted with the launch of CBDCs,” said another official.