What is a Central Bank Digital Currency (CBDC) ? CBDC is a | UPSCMainsZone

What is a Central Bank Digital Currency (CBDC) ?

CBDC is a legal tender issued by a central bank in a digital form.

It is similar to a fiat currency issued in paper and is interchangeable with any other fiat currency

What is the need for CBDC?

the goal is to provide users with convenience and security of digital as well as the regulated, reserve-backed circulation of the traditional banking system.

What does this change for citizens?

There are several models proposed by technology experts and evangelists on how the Digital Rupee could be transacted but a formal announcement by the Reserve Bank of India will likely detail how the Digital Rupee will be transacted by citizens.

One chief difference will be that a Digital Rupee transaction will be instantaneous as opposed to the current digital payment experience.

@UPSCMainsZone