CBDC News Updates: Indian Finance Minister Addresses CBDC Issues in Parliament
CBDC News Updates: Indian Finance minister Nirmala Sitharaman stated that it was too early to evaluate the spillover effects from central bank digital currencies (CBDCs), during the question hour of parliament, according to a report by IANS.
T. Sumathy, a member of DMK, asked about autonomy and state control if CBDCs were launched. The FM stated that CBDCs were issued by the Reserve Bank of India. The pilot project was launched by the RBI in December last year and is currently being monitored for its wholesale and retail use. They will only be able to determine if there are any spillovers from the digital currency once the process is complete.
Sitharaman also stated that CBDCs can offer many benefits, including financial inclusion and improved payment system, but their impact on the global economic landscape is still unknown.
Sitharaman’s approach to CBDC
Sitharaman acknowledged the potential of CBDCs to facilitate cross-border transactions, and increase financial inclusion, particularly in countries with large unbanked population. She also pointed out the potential risks and challenges that CBDCs can pose, such as cyber threats, and the potential for financial instability, if they aren’t implemented properly.
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The Finance Minister stressed the importance of international coordination and cooperation in developing and deploying CBDCs. She noted that CBDCs can offer many benefits at the national level but their impact on global financial systems is still unknown.
The status of CBDCs across different countries
CBDCs are digital currencies that can be used to replace fiat currency in a country. They are issued by the central bank and backed by it. They can be used to pay for goods and services, much like physical cash, but with digital technology. Many central banks around the globe are exploring the possibility to launch their own CBDCs. This includes the US, China, and the European Union.
It is possible that central banks will explore different models and approaches as they investigate the feasibility of CBDCs. Some countries might launch retail CBDCs, which are open to the public, while others may only offer wholesale CBDCs to financial institutions.
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