The Reserve Bank of India on Wednesday said cyber security and digital frauds are its main concerns when considering the introduction of a central bank digital currency (CBDC).
“Our main concern comes from cyber security and possibility of digital frauds. So, we have to be very careful about that. Just as few years ago, we had a major concern over fake Indian currency notes … similar thing can happen when you are launching the CBDC,” RBI Governor Shaktikanta Das said Wednesday at a post monetary policy press conference.
“So therefore, in a CBDC universe, we have to be that much more careful with regard to ensuring cyber security, and taking pre-emptive steps to prevent any kind of frauds. Because there will be attempts so we have to have a robust system to combat it,” he added.
“On CBDC, there are two kinds of work that is currently going on. One is on wholesale account based, the other is retail,” RBI deputy governor T Rabi Sankar said on Wednesday. “A lot of work is already done on wholesale accounts but the retail issue is slightly complicated and we will take some time on it. As soon as any of it is ready, we will release it on pilot basis,” he said. However, he did not divulge any timeframe for introduction of the digital currency.
CBDCs are the virtual or electronic form of fiat currencies (like the Indian rupee or US dollar). The Reserve Bank of India is working on a strategy to introduce a digital currency in a phased manner, the finance minister had told Lok Sabha earlier this week. These developments come at a time when the government is working on a law for regulating cryptocurrencies. Moreover, other central banks such as the US Fed and the People’s Bank of China are also planning their own digital currencies.