The Reserve Bank of India has launched the digital Rupee, which is a central bank digital currency (CBDC). In a piece for Mint, Dr Niranjan Rajadhyaksha, Executive Director, Artha Global, opines that this can be called the fourth big transformation in the nature of fiat money.
Excerpts below:
“The current design of the Indian CBDC is focused on money as a medium of exchange rather than a store of value. India already has a world-class digital payments system, or the United Payments Interface (UPI). It has become ubiquitous in most parts of the country. The current version of the retail CBDC—admittedly an initial experiment to feel the waters—has to compete with the UPI ecosystem. It will be worth seeing how that works out in the coming months.”
“In the early years of the 20th century, a group of monetary theorists known as chartalists argued that modern money has no intrinsic value but is widely accepted in a territory because the government requires that you pay taxes in that money. […] Does that idea deserve a fresh airing in this new age of CBDCs?”
Read the full article here.
