CHANDIGARH: Having launched digital currency on a pilot basis, the RBI is exploring different use cases such as programmability, which means programming the money by tying the end use.
By programming, the money can be precisely targeted for what kind of use it can be utilised. This would be beneficial for the effective implementation of the government schemes or subsides so that a particular subsidy is not used for other purposes. For example, the direct benefit transfer of fertiliser subsidy will be utilised only for buying fertilisers.
The Central Bank Digital Currency (CBDC) is a digital form of currency notes issued by the RBI. The e? will provide an additional option to the currently available forms of money. It is substantially not different from banknotes, but being digital it is likely to be easier, faster and cheaper.
The digital rupee can be used in many real-world applications, such as programmable payments for subsidies and quicker lending and payments by financial institutions.
“For future considerations, we are eyeing different use cases and programmability is one option. Tying the end use of money can be designed in electronic rupee to better target the specific use of funds,” said Ajay Kumar Choudhury, Executive Director, RBI, at an outreach seminar titled “Central Bank Digital Currency: The India Story” held here.
“We will offer this option to the government and it’s up to them to adopt it or not,” he said.
He said the RBI is also contemplating interoperability of digital currency with existing payment system. In addition to this, offline options are also being explored so that its availability and resilience is assured when mobile network is not available. Besides, it would also enable more real-time and cost-effective seamless integration of cross-border payment systems. The RBI has already launched pilots of CBDC in both wholesale and retail segments.