Bankers say they lack clarity on CDBC launch
People seem to be unaware of the launch of a Central Bank Digital currency (CBDC)by the Reserve Bank on December 1.
The RBI on November 29 announced it would launch the first pilot for retail digital Rupee (e₹-R).
The e₹-R will be in the form of a digital token that represents legal tender. It will be issued in the same denominations that paper currency and coins are currently issued. It will be distributed through banks. Users will be able to transact with e₹-R through a digital wallet offered by the participating banks and stored on mobile phones/devices, the website said.
Yashwanth Sai, a product manager working in a fintech startup in Bengaluru, said: “There is not much awareness about this. We’ve been reading about CDBC on the Internet, but… we do not know what exactly it is. I do not think CDBC would be as flexible as UPI, transaction-wise. I do not see myself using it even if its success.”
Hemanth V, a wholesale distributor for grocery, shared:“The distributors I deal with are not even comfortable with using net banking…. People are using UPI but only for QR code transaction. Not everyone uses it for every bill payment. Even with proper education on how to use it, most of them will not prefer it.”
N.S. Rao, a retired assistantgeneral manager with Canara Bank, informed The Observer about the idea behind CBDC.“The base idea for launching the CBDC is to substitute cryptocurrency in our country. Cryptocurrency cannot be regulated unlike CBDC…. But it might not have a great buzz in our country. Many people have lost their cryptocurrency because they forgot their passwords…. I do not think this will be used like how we use UPI for transactions.”
Nakula Reddy, an economist,shared: “Not everyone can access CDBC once it’s launched. Our country’s economy is not prepared for digital currency. In India, digital illiteracy is very high compared to other countries. Sure, everybody has a smartphone, but how many know how to use it? To use CDBC, everyone should have a smartphone with good Internet. After launch, we will have many problems….”
Banks say they still lack clarity on the CDBC launch.
Srikanth G, a deputy general manager working with SBI, said:“We are still skeptical of this. The technology that we need to incorporate is still oblivious. One thing we know is that people are still technically illiterate….SBI is still not aware of what we are supposed to do with the launch. We are waiting for instructions from RBI.”
Vishal Thyadi, a branch manager with HDFC Bank said: “Our bank will join this trial later this month. One of the problems that are not addressed is how we are going to promote CBDC among our customers.”
The Observer was informed by RBI employees that because of their bank policy, they cannot disclose any information to the press.
A report in the Economic Times says that RBI believes that the digital rupee system will “bolster India’s digital economy, enhance financial inclusion, and make the monetary and payment systems more efficient.”
According to an NDTV report, the first phase will begin with four banks -State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank in four cities across the country. The pilot will cover Mumbai, New Delhi, Bengaluru, and Bhubaneswar, RBI said.
