Context:
The Reserve Bank of India (RBI) is introducing a credit for allowances reimbursed to CBDC wallets of RBI officers.
Key Highlights:
- CBDC is a digital form of fiat currency issued by a country’s monetary authority.
- The move is seen as a safer and smarter payment option and counter cryptocurrencies.
- CBDC is the responsibility of the central bank, and its conversion into savings account money diminishes the bank’s deposit.
Central Bank Digital Currency (CBDC)
Central Bank Digital Currency (CBDC) is a form of digital currency issued and regulated by a country’s central bank. Unlike cryptocurrencies such as Bitcoin or Ethereum, which are decentralized and not controlled by any central authority, CBDCs are issued by the country and are a digital version of a country’s fiat currency.
