Finance Minister Smt. Nirmala Sitaraman has announced the introduction of Digital Currency into the Indian Economy in Budget 2022. It would be Central Bank Digital Currency (CBDC). RBI will bring this New Format of Currency in the Upcoming Financial Year.
CBDC is a big move for the Indian Economy and India will become the first Big Country to officially introduce its own Digital Currency.
How Digital Currency will work:
- Central Bank Digital Currency would be in Virtual Form.
- It would be like Paper Currency, but would be in Digital Format.
- We can make transactions, or even pay bills through this currency.
- Digital Currency can be kept only in Online Wallet.
- Central Bank Digital Currency will get Legal Authentication for all transactions.
Questions / Answers:
1. Question: Who will launch Digital Currency (CBDC) ?
Ans. – (a) Reserve Bank of India will launch CBDC in new Financial Year. It will be based on Block chain Technology.
(b) CBDC introduced in Digital Form by RBI would be a Legal Tender. It would be like Normal currency of the country, but would be in Digital Format.
(c) CBDC would work like normal paper currency. Even CBDC could be exchanged with Normal Currency.
(d) As per RBI Report, CBDC would be safe for all transactions as compared to cash currency.
2. Question: Is Digital Currency Similar to Crypto Currency?
Ans. (a) CBDC is not a Crypto Currency. CBDC is a Legal Tender of RBI.
(b) As it is recognized by RBI, there would be no risk in CBDC use.
(c) Private Virtual Currency like Bit coin has lots of obstacles in its usage and even not recognized by all the Nations.
(d) As no Government is attached with Private Virtual Currency, it is very risky.
3. Question: Is CBDC risky like Bitcoin?
Ans. (a) As per Investopedia Reports, Government target is to provide a legal and convenient currency to normal people, so that Normal people do not suffer due to security reasons.
(b) At so many times, RBI has shown concern related to the usage of Private Virtual Currency- Bit coin.
(c) As the usage of Bit coin can enhance the practices of money laundering, Terror Financing, Tax Evasion etc. RBI has decided to introduce his own Digital Currency,
(d) Digital Currency has been introduced in its complete form in Nine Countries.
(e) Bahamas, 7 Eastern Carribean and Nigeria is Included in it.
(f) 87 Countries are still in research process of Digital Currency.
(g) 14 Countries included China and South Korea is in Process of Launching of Digital currency.
4. Question: Is Digital Currency would be beneficial for Normal People?
Ans. Yes, it would be beneficial for Normal people. With the introduction of Digital Currency, cost of transactions would be reduced.
As per World Bank Estimates, at Present it cost about 7 percent fees to send money to other countries. With the Digital Currency it would be reduced by 2%.
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