Central Bank Digital Currency (CBDC) Implementation in India

Abstract

Central bank digital currency (CBDC) is transforming the financial landscape by enhancing financial inclusion, boosting transaction efficiency, and providing more control over monetary policy. As central banks throughout the world investigate and implement, CBDCs are expected to have a revolutionary effect on the financial ecosystem. A CBDC system's design poses several social and technological challenges. This study has discussed the design considered for the execution of CBDC by the central bank in India. The study also presents the potential advantages of introducing CBDC, including financial inclusion, decreased transaction cost, improved monetary policy, money supply management, innovative financial services, and decreased counterfeiting. It is imperative to carefully assess the issue of the India CBDC against any potential advantages. Central banks need to consider the technological, security, design, and legal aspects, operational risk management, public acceptance, legal and regulatory frameworks for effective implementation of CBDC in India.