India’s e₹ (Digital Rupee) - Wholesale CBDC and/or Retail CBDC
India’s e₹ (Digital Rupee) - Wholesale
CBDC and/or Retail CBDC
The
concept paper mentions the types of CBDC or e₹ (Digital Rupee)
that are planned for India.
As
the issuance date comes closer, there may be more clarity on the exact types of
CBDCs which can be seen in our country.
As
of now, the following CBDC types are in pipeline: -
Wholesale CBDC and/or Retail CBDC:
Highlight A) As the
word denotes, Wholesale e₹ (Digital Rupee) is for low volume, high value transactions.
Highlight B) As the word
denotes, Retail e₹ (Digital Rupee) is for high volume, low value transactions
Retail currency is used to pay
for things, to send money to friends and family, and to receive government
incentives and subsidies
Wholesale currency is used by financial
institutions to buy and sell financial assets and interbank settlement
Type of CBDC to be issued
CBDC can be classified into two
broad types viz.
general purpose or retail
(CBDC-R) and wholesale (CBDC-W).
Wholesale CBDC -
Restricted access to select financial institutions.
Retail CBDC – Access
to all viz. private sector, non-financial
consumers and businesses
Wholesale CBDC – Primarily
for settlement of interbank transfers and related
wholesale transactions
Retail CBDC - An
electronic version of cash primarily meant for retail transactions.
Retail CBDC - It is
believed that Retail CBDC can provide access to safe money for payment and
settlement as it is a direct liability of the Central Bank.
Wholesale CBDC –
Wholesale CBDC has the potential to transform the settlement systems for
financial transactions and make them more efficient and secure.
CBDC-W could also be explored for
the following:
1. Wholesale market for asset
classes that are OTC and bilaterally or settled outside CCP arrangements- CPs,
CDs, etc.
2. Access to retail for buying
assets such as G-secs, CPs/CDs, primary auctions etc bypassing the bank account
route
The best example of Retail CBDC
is UPILite
As and when the final guidelines
are released by Reserve Bank of India, it will be clear which type of e₹
(Digital Rupee) will be introduced in India.
As per the concept paper, both
Wholesale and Retail e₹ (Digital Rupee) may be introduced in India.
So, what is your choice?
Wholesale e₹ (Digital Rupee) or Retail e₹ (Digital Rupee)
or a combination
unique to India.
A unique combination that can be
replicated across the world, just like UPI.
Disclaimer: These are my personal
views only. The bottom line is Safe ePayments. Nothing More – Nothing Less.
I am solely responsible for
errors, if any.
Copyrights, if any belong to the
original copyright holder only.
Very Nice Post....Thanks for Sharing Usefull Information......
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