RBI Reflects On CBDC, Cyber Security, Frauds And Digital Risks
RBI has stated earlier this year that they have started working on their digital currency. This is why the ban on all the other digital currencies was inevitable. They have started working on central bank digital currency. It has initiated the strategy to launch the CBDC (Central Bank Digital Currency) as stated by Governor Shaktikanta Das.
He pointed out the various fronts of digital frauds and cyber security that are the main challenges to overcome in the respective system. The Deputy Governor, T Rabi Sankar, also stated that they are going to work on two CBDCs, and that is retail and wholesale. According to him, a lot of work has already been done in the wholesale segment, but the retail sector is still in the complicated zone.
Earlier it was announced by the RBI that it had initiated the work on the CBDC. This approach has been followed in line with all the other central banks of the world that are more prone towards fiat digital currency. As per the recent reports, the Reserve Bank of India is initiating the work on the same front but in the pilot mode by early 2022.
Das stated that the primary concern comes in the form of digital fraud possibility and cybersecurity issues. If not careful, it can lead to significant losses. He also stated that a few years back, their several issues in the form of fake currency and many similar aspects. These things can again play a big role in the launch of CBDC. But, it is important to keep these aspects away but imply the necessary security infrastructure and firewalls.
As explained by Sankar, CBDC is going to be an electronic update of the present paper-based currency. He also stated the risks that revolve around digital transactions and frauds. These are the major challenges to deal with while implementing the same.
He added that the wholesale segment has already seen a significant amount of advancements, but in the retail sector, it is still quite complicated and is going to take time for implementation. The one that is ready first is going to be released in pilot mode.
Das also hinted about a soft CBDC launch at the end of December 2021, but above all, the concerns are still there to be taken care of in terms of security and digital risks.