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Highlights
- Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday raised concerns related to cyber frauds in launching virtual currencies.
- Earlier RBA’s Philip Lowe had said that there was no strong need for CBDC.
- However, Lowe had cautiously welcomed the possibility of the creation of a digital currency.
Major central banks across the globe are not in a hurry to roll out digital currencies. Just after the Reserve Bank of Australia (RBA) Governor Philip Lowe rejected any strong need for the same, the Reserve Bank of India (RBI) Governor Shaktikanta Das raised concerns related to cyber frauds in launching virtual currencies.
Speaking at a post monetary policy press conference on Thursday, Das said that main concerns around launching the central bank digital currency (CBDC) are from the angle of cyber security and the possibility of digital frauds. These currencies require robust systems that thwart such malafide attempts, he added.
Earlier in July this year, the RBI had said that it was working towards a phased implementation strategy for a CBDC and was examining whether CBDCs should be used in retail payments or also in wholesale payments.
Meanwhile, on Thursday, Lowe said there was no strong need for CBDC, even as he cautiously welcomed the possibility of the creation of the same. The remarks came a day after Treasurer Josh Frydenberg’s said that the Australian government was mulling a digital currency as part of an overhaul of the payments system.
“Bank's view is that no strong public policy case has yet emerged for the introduction of a CBDC for general use. Australian households and businesses have access to payment services that have been upgraded significantly in recent years and meet most of their current needs,” Lowe said at the Australian Payments Network Summit on Thursday.
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“It is not obvious that a CBDC would be a solution to any particular problem or that there would currently be a significant demand for one,” he added.
What is a CBDC?
A CBDC is a sovereign currency in an electronic form. It would appear as a liability (currency in circulation) on the balance sheet of a central bank.
According to a survey conducted by the Bank for International Settlements (BIS) this year, 86% of central banks were actively researching the potential for CBDCs. While 60% were experimenting with the technology, 14% were deploying pilot projects, it added.
These digital currencies could be designed for use either among financial intermediaries only (wholesale CBDCs) or by the wider economy (retail CBDCs), according to the report.
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