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India’s Central Bank is Exploring Offline Functionality for Digital Rupee

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It is reported that Ajay Kumar Choudhary, Executive Director of the Reserve Bank of India (RBI), provided some latest information about the Central Bank of Ind…

India’s Central Bank is Exploring Offline Functionality for Digital Rupee

It is reported that Ajay Kumar Choudhary, Executive Director of the Reserve Bank of India (RBI), provided some latest information about the Central Bank of India’s digital currency (CBDC) in an interview with CNBC. Choudhary said that the Central Bank of India was exploring the offline function of the digital rupee. Noting that CBDC will soon become a medium of exchange in India, he stressed that it needs to have all the characteristics of physical currency, including anonymity. RBI Executive Director previously said that the design of India’s CBDC would be the least disruptive and would not replace the physical currency or the current financial system.

RBI official: The digital currency of the Central Bank of India will replace the cryptocurrency

Interpretation of the news:


The Reserve Bank of India (RBI) has provided an update on the progress of Central Bank Digital Currency (CBDC) development in the country. Ajay Kumar Choudhary, the Executive Director of RBI, revealed in an interview with CNBC that the central bank was exploring the offline function of the digital rupee. This could potentially differentiate India’s CBDC from other similar initiatives worldwide.

While CBDCs are set to become a medium of exchange in India, Choudhary emphasized that they need to have all the characteristics of physical currency, including anonymity. This aligns with the RBI’s previous assertion that the digital currency would not replace physical currency or disrupt the current financial system. In designing India’s digital rupee, the central bank seems to be prioritizing continuity and accessibility.

Exploring offline functionality for CBDC could be justified by India’s large population and comparatively low internet penetration rate. Providing the ability to conduct transactions offline would likely increase the adoption rate and encourage those without regular access to the internet to use digital rupees. It could also enhance the digital currency’s usability in areas with inconsistent or unreliable connectivity.

However, there are concerns about the potential risks associated with offline CBDC transactions. Similar to physical cash, it might be challenging to trace the flow of digital rupees without an internet connection, which could increase the possibility of illicit activities such as money laundering and terrorist financing. Nevertheless, Choudhary did not specify whether the offline transactions would be accompanied by additional security measures or how the central bank planned to mitigate the risks.

In summary, the RBI is actively exploring offline functionality for India’s digital rupee, aiming to ensure that it has the same characteristics as physical currency. The central bank’s approach seems to prioritize continuity and accessibility, while also considering the potential risks of offline transactions. The challenge now is to strike a balance between encouraging wide adoption of CBDCs and ensuring the safety and security of users’ funds.

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