Indian central bank: E-rupee is an alternative to crypto

The Reserve Bank of India, India’s central bank, has a plan for its own Central Bank Digital Currency (CBDCs) published. In the draft, the mega-country’s central bank explains its vision for the digital version of the rupee, which will go through life as the e-rupee.

CBDCs are going around the world

India is not the only one where they are currently seriously looking at the implementation of a CBDC. India’s central bank paper cites, among others, China and 16 other countries that are currently piloting. In India, the e-rupee should primarily become a substitute for paper money. The implementation of this and the complete disappearance of paper money could in theory prevent the collapse of banks.

We are now talking about a bank run when people want to withdraw money, but the bank does not have enough paper money to help all customers. In principle, this is no longer possible in a system in which paper money does not exist. “We are on the cusp of a financial revolution that will change the money system and its functions forever,” said India’s central bank.

E-rupee is an alternative to crypto

According to the paper from the central bank of India, the digital version of the rupee should act as an alternative to crypto. The rampant use of crypto poses a risk to the country’s financial and macroeconomic stability, according to India’s central bank. In addition, the decentralized nature of crypto means that the government has little or no influence on monetary policy.

“CBDCs provide the public with the benefits of digital money, while also protecting consumers and avoiding social and economic harm,” the Reserve Bank of India said. We should not expect privacy from the e-rupee, because the Indian central bank indicates that ultimate privacy is precisely the problem of paper money.

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